There are major changes afoot that will affect pensions for those coming up to retirement from the end of the year. The Gender Directive is set to land on 21st December 2012 and this will mean that annuities can no longer be offered on a single gender basis.

Potentially men will suffer most as providers can only offer single gender rates and hence will equalise these rates downwards. Currently female annuities are lower than male rates as they have better life expectancy. You could be forgiven for thinking that at last women will benefit however this is not necessarily so. To date providers have remained silent on their intentions, and whether female rates will increase and if so, by how much.

Hence sex equality may not have any benefits for the fairer sex after all!

Males planning to retire soon should consider how sex equalisation is likely to?affect their plans. Those who have the flexibility to choose when they retire may wish to consider converting their pension pot to income now rather than wait for the Gender rules to impact.

The changes could also affect capped drawdown rates so anyone considering retirement income in this way may be better to act sooner rather than later.

Whether you are male or female, or retiring this year or next, the income you?secure has to work hard for many years to come.

• Compare quotes from a number of providers or via an annuity supermarket to obtain the best possible income. Avoid opting for your existing provider’s quote until you have first checked out if their rate offers good value.
• When shopping around it is important to ensure that existing health conditions and lifestyle factors are considered. You could be entitled to a significant increase in income that will benefit you throughout retirement.
• If you are fortunate to have a sufficiently large pension pot you could take some of this as flexible drawdown. With this part of the pot you do not need to purchase an annuity so minimising the effect of the proposed changes. Firstly you have to establish a minimum level of pension income, currently ?20,000, which can include state pensions and lifetime annuities from registered pension schemes.
• Contact a specialist annuity adviser to help you through this important financial decision. You have one chance to get this right. Once the annuity is purchased there is no turning back, so you should be confident that the annuity you buy is the best it can be.