Postcodes determine annuity income
Norwich Union, part of Aviva, will determine what the life expectancy of people buying an annuity is - based solely on their postcode.
The group claimed that 70% of customers converting their pension pot into an annuity would be the same or better off after the move, while the remaining 30% would probably be worse off. Those adversely affected are likely to be people living in affluent areas, as they have a longer life expectancy.
From the end of November, Norwich Union will also include in its pricing model details on people's marital status and whether or not they smoke.
These factors are currently not included in pricing for standard annuities, which provide people with an income for the rest of their life, although smoking is taken into account for impaired-life deals.
Clive Bolton, the group's director of annuity business, said: "Many customers will benefit from these changes as we tailor quotes to better reflect their individual circumstances and lifestyle."
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