Changes to Annuities Pricing

From 18 August 2008, we will be applying Lifestyle Pricing to our Guaranteed Annuities.

What is "Lifestyle Pricing"?

Lifestyle Pricing reflects the fact that a person's lifestyle affects their mortality and that a person's postcode can be used as an indicator for their lifestyle (i.e. there is a strong link between postcode and diet, smoking habits, occupation, wealth and so on).

Through applying Lifestyle Pricing, those living in less affluent postcode areas, where life expectancy is lower than average, will receive higher annuity income than those living in more affluent regions where life expectancy is higher than average.

So, which factors will be used to determine price?

Lifestyle Pricing will continue to make use of the existing factors (which include: age, sex, fund size and annuity basis (single/joint life)), but will also now use postcode to determine price.

Which Prudential products does this apply to?

Initially Lifestyle Pricing will be applied to guaranteed non-profit annuities only, on funds above £30k. All other annuities will remain unaffected. We may widen this to other products and smaller funds at a later date.

Please note Internal vesting customers will not receive lifestyle pricing.

What does this mean for me?

In order to secure a guaranteed rate for your client, you will have to provide their postcode when applying for an illustration. Please make sure you include this when applying for an illustration via fax or Email.

More information

If you would like any more information please contact your usual Account Manager or call our Retirement Income Specialists on 0845 60 60 630.