Pension payouts dependent on postcode
Legal & General, one of the largest insurers have announced a shock new tactic when it comes to arranging the pension payouts of their customers. The initial pilot stage has just finished, so only time will tell if this will affect the number of new customers they get.
The scheme involves paying higher pensions to people who just so happen to live in places that have a shorter life expectancy than other areas in the UK. After the success of the pilot scheme, they have decided to roll it out nationally.
Those people who live in areas that are known to have a lower life expectancy will be paid more of a pension than those who are expected to live longer. For example people living in Glasgow only have a 65 year life expectancy - 10 years lower than someone living in wealthy Chelsea.
It means that people at the lower end of the health and wealth spectrum will not be subsidising those at the other end of the scale. The extra cost of the payments will be paid for by the companies profits and not taken away from any customer.
There are already some insurers that do a similar thing - pay a higher pension to smokers and other life-shortening illness. It is supposedly a fairer system and the postcode pension is only the beginning. Eventually they hope to trial payouts according to other factors like health and lifestyle.
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