Law firm Reynolds Porter Chamberlain has warned insurers of the increased liabilities they face as a result of the May 2006 Government White Paper on Pension Reform, which proposes a three year increase in the state pension age before 2050.
RPC predicts that the changes will raise the value of future loss of earnings claims, increasing claims costs. An individual who would have claimed for loss of earnings up to age 65 might now be able to justify claiming a later retirement age, and therefore a higher loss of earnings.
Gavin Reese, a partner at RPC said: “The UK faces its most dramatic change to pension law, and few will be left unaffected. The increased pension age may seem a long way off but it will have an immediate impact on insurers. They will either have to swallow the additional cost themselves, or they will need to factor it in to their premiums.”
The proposals are at present a White Paper, which is open for consultation until September 11th 2006.
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