Women under 25 face motor insurance premium rises of up to 40% from today as the European Union ban on gender pricing comes into effect, according to PricewaterhouseCoopers.
The change under the EU Gender Directive is also expected to reduce men's annuity payouts by £10,000, the consultancy said. Currently women's longer life expectancy means they typically receive lower annuities than men.
PwC insurance partner Mohammad Khan said the directive would have a 'significant effect' on the premiums young drivers pay. 'For young female drivers aged under 25 this will probably result in motor premium increases of between 10% and 40%. For young male drivers conversely, the directive could result in premium decreases of up to 10% depending on their claims experience.'
He added: 'Statistics show young male drivers are more likely to have more severe accidents and make larger and more frequent claims on their car insurance than young female drivers. Insurers will have to ignore this fact to ensure they comply with the directive.
Young female drivers facing a steep increase in premiums could consider new technologies such as telematics or 'pay-as-you-drive' insurance to reduce the cost of cover, he added.
In terms of annuities, many more people risk losing out under the new rules than gaining, according to Raj Mody, head of pensions consulting at PwC. He said men currently buy eight out of ten annuities sold in the UK.
'Women who are beneficiaries of joint life annuities purchased by their male partner will also be affected as they will end up with a lower income,' he added.
'With annuity rates under even more pressure, it is more vital than ever that people shop around for the best rate and do not simply accept the rate offered by their pension provider. The difference between the best and worst annuity rates in the market can easily be around 20% to 30%.'