Pensions Bill

Although I, too, am very sympathetic to the noble Baroness for her great work on behalf of women’s equality, I am not sympathetic to this amendment. It may appear to some people that it is unjust to women that they will receive at the age of, say, 65 a lower annuity rate than men but, if you switch it round and demand a unisex annuity, it will appear unjust to many men that they get the same annuity rate but, on average, for fewer years. There is a wider issue here: whether we want to encourage within the insurance industry greater or less discrimination of classes or pools of insurance. There are some dangers in going to the extreme end of discrimination—there are some complicated issues that will eventually face us involving genetic testing and the ability to predict whether someone has a predilection to a particular condition but, on the whole, greater discrimination is likely better to serve the social ends that we might want. For example, it is the case that lower-income people have lower life expectancy than higher-income people. The existing annuity market involves a cross-subsidy from poor people to rich people. The insurance industry is increasingly looking at whether it can undo that cross-subsidy by having annuities based on the postcode, income or some other indirect indicator of likely life expectancy. If the result of that is that the working-class man from Glasgow ends up with a better annuity rate than the professional person from London, that would be a thoroughly useful form of discrimination, which will help to offset some of the problems of inequality in life expectancy. As I say, although we will face some extreme issues decades down the line about how we deal with genetic testing and so on, social purposes, at least for now, are better served by a better degree of discrimination between different, more narrowly defined categories of insurance risk than by trying to demand unisex, ““uniclass”” or other categories of intervention in the annuity market.