either interesting or very very dull
Jan. 16th, 2003 02:26 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
ajvaA few months ago I was reading through a financial magazine, learning about lots of finance-based stuff, and came across an article on pensions. Now, I had never looked at all that boring stuff before and was startled to discover how they work, and there was one aspect in particular that angered me.
I wondered why I hadn't heard of the problem before; to me it was a blatant cut-and-dried example of sexism.
Basically, all that money you pay into a pension fund - what happens when you retire? Do you get your money back? Like hell you do.
You get 25% of it back as a tax-free lump sum, and then you have to buy an income called an "annuity". So if you're a 65-year-old bloke, and you have £100,000 saved up, you could expect to buy an income of about £6,500 a year for life.
Of course, women live longer on average, so a 65-year-old woman with the same amount saved up, buying the same annuity, WILL ONLY GET ABOUT £5,600 A YEAR FOR LIFE (because on average the company will have to pay women a larger number of payments).
Right. So presumably, since men in Barnet live on average 5.4 years longer than men in Lanarkshire, then those men applying for annuities from addresses with a north London postcode will 'enjoy' a proportionally smaller income than the Scots? What about average life expectancy differences by race? Or sexuality? I thought actuaries were supposed to be clever? Is it really beyond their capabilities to average this shit out between men and women?
Fuckers.
Still, the whole situation is under review - annuities and all. Also, today I am doing random surfing, and discovered this report on the matter. Apparently it is being fought against after all. Good. Now I won't have to write to the FT.
I wondered why I hadn't heard of the problem before; to me it was a blatant cut-and-dried example of sexism.
Basically, all that money you pay into a pension fund - what happens when you retire? Do you get your money back? Like hell you do.
You get 25% of it back as a tax-free lump sum, and then you have to buy an income called an "annuity". So if you're a 65-year-old bloke, and you have £100,000 saved up, you could expect to buy an income of about £6,500 a year for life.
Of course, women live longer on average, so a 65-year-old woman with the same amount saved up, buying the same annuity, WILL ONLY GET ABOUT £5,600 A YEAR FOR LIFE (because on average the company will have to pay women a larger number of payments).
Right. So presumably, since men in Barnet live on average 5.4 years longer than men in Lanarkshire, then those men applying for annuities from addresses with a north London postcode will 'enjoy' a proportionally smaller income than the Scots? What about average life expectancy differences by race? Or sexuality? I thought actuaries were supposed to be clever? Is it really beyond their capabilities to average this shit out between men and women?
Fuckers.
Still, the whole situation is under review - annuities and all. Also, today I am doing random surfing, and discovered this report on the matter. Apparently it is being fought against after all. Good. Now I won't have to write to the FT.
Re: it goes on...
Date: 2003-01-16 12:29 pm (UTC)Gosh! Talk about major incentive to stay single. What a good time to start work.
AIUI the other other factor at the moment is that annuties are largely based on government bonds. Since there is less government debt, the government is issuing fewer bonds. And since people like the life insurance companies have to buy them, demand is still high so their price is now higher. So people's pensions are smaller.
By the time we retire, there will have been some big changes.