Soapstars highlight that shopping around is key to a reasonable retirement

Article date: 22 September 2008

Avid watchers of the soaps would realise that the issue of pensions is not a topic of conversation that usually raises its head at the Vic, the Rovers or the Woolpack. But research by Norwich Union, part of Aviva, shows that perhaps it should be to ensure that people get a fair price for a lifetime's worth of pension saving.

By using new methods for calculating income in retirement, someone like Jack Duckworth from Coronation Street, could be £2,9971 better off over the course of his life. Jack's situation in life (smoker*, widowed) means that he comes out on top of clean living Ken Barlow by over £1002 a year and over £1,7002 during their lifetimes.

The good news continues for those who are single. Liz MacDonald, would be £4,3091 better off over the course of her lifetime and, compared to her married friend Deidre Barlow, £293 a year better off as result of being a single person.

If you don't smoke and are married you can still benefit from the new lifestyle rates because it also uses where you live (ie your postcode) as a factor to decide your rate. For example Eastenders' Peggy Mitchell would receive £13752 more than Emmerdale's Diane Sugden who lives 200 miles north. 

Bringing it back to reality - our research shows that a typical couple3 could benefit by over £1,7601 over the course of their lives just by taking a bit of time to shop around when looking at their retirement options.

With Norwich Union set to use5 smoking history, relationship status and postcodes to help decide how big pension payouts (ie. annuities) will be, it is important that people realise that it isn't always the more affluent in society who get the best rates. Our life expectancy maps4 highlight areas where ratings will differ and help Norwich Union ensure that customers are getting a fair amount for a lifetime's worth of pension saving. 

Clive Bolton, director of annuity business, Norwich Union, said: "Research6 has shown that the natural assumption is that those who live in the south or the posher parts of our towns will be better off when it comes to annuities. But this is not always the case.

"Our new lifestyle rates help people understand that it is not the more affluent areas that do best when it comes to annuity rates. What is important is that people take the opportunity to shop around for the best deal - especially those that are tailored to them and their lifestyles. When we are all feeling the pinch, shopping around can result in individual's being better off.

"We want to ensure that customers get a fair deal and in these uncertain times to provide them with an opportunity to make every pound count."

* There is a distinction between annuity rates for smokers who do not have any illnesses and enhanced annuity rates for those people who, upon application, have a diagnosed illness.

-ends-

For further information:

Cheryl Cox
Telephone: 01904 452791
Mobile: 07800 695275
E-mail: cheryl.cox@norwich-union.co.uk

Damian Boylan
Telephone: 01904 452659
Mobile: 07800 697646
E-mail: damian.boylan@norwich-union.co.uk

Notes to editors:

1 Quotes based upon assumptions of:

  • Person taking out a pension annuity at the age stated retiring at 62 (female) 65 (male) and living to the life expectancy ages of 82 (male) 87 (female)
  • pension pot of £30,000

The amount is calculated by subtracting the Norwich Union lifestyle rate (which includes postcode, smoker and relationship) from the industry average rate and then multiplying the difference by the number of years remaining until they reach life expectancy age ie 82 (male) 87 (female).

Norwich Union lifestyle rate - Industry average rate X No years remaining until reach life expectancy = amount

Example Jack Duckworth: £2,272 - £2,233 = £176 X17 = £2,997

2 Calculation reached by Norwich Union lifestyle annual rate - Industry average annual rate =  amount

Based on male 65, female 62 with pension pots of £30,0000 from York. The amount is calculated by subtracting the Norwich Union rate from the industry average and then multiplying the difference by the number of years remaining until they reach life expectancy age ie 82 (male) 87 (female).

Norwich Union lifestyle rate - Industry average rate X No years remaining until reach life expectancy = amount

4 Maps of the following cities: Bristol, Glasgow, Liverpool, London and Manchester are available to highlight how the new quotes system will impact those with different life expectancy.  Maps for illustrative purposes only.

5 Postcode pricing goes live from Monday 22 September 2008.  The use of smoker and relationship information will follow in November 2008.

6 Research undertaken by Norwich Union by Onepoll in August 2008.

About Norwich Union
Norwich Union is one of the UK's biggest life insurers. It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.

Norwich Union has strategic alliances with building societies and other leading UK brand names including CIS and The Royal Bank of Scotland Group. Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media

In the summer of 2009 Norwich Union will change its name to Aviva.  Aviva is the world's fifth largest insurance group and operates in 27 countries. Aviva is to become the customer brand worldwide, thus enabling the company to compete even more effectively on a global scale for the benefit of customers, staff, business partners and shareholders.

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