Legal & General Share News (LGEN)

By Myles Neligan LONDON, Jan 9 (Reuters) - A European Union ban on insurerscharging men and women different prices has boosted the incomeof British female retirees, finance data firm Moneyfacts said. The ban has lifted payments for women who hold an annuity -an investment policy that pays retirees a regular income untildeath in return for a lump sum - by 2.9 percent, while paymentsfor men have fallen 2.7 percent, Moneyfacts said on Wednesday. The changes came as insurers complied with the ban byintroducing equal payment rates for men and women, havingpreviously paid women less because they live longer on average. The EU's highest court banned insurers' practice of chargingmen and women different prices as sex discrimination in March2011 after Belgium's consumer association brought a test caseagainst it. The ruling will likely lead to higher insurance costsoverall as insurers probably won't match price increases withequivalent cuts, analysts have said. While the ban has delivered a financial boost to femaleretirees, it is expected to raise car insurance costs foryounger women by up to 40 percent. Women had previously benefited from lower prices than menbecause they are statistically less likely to crash. Annuity income for women still fell 6.1 percent overall lastyear as insurers passed on a drop in the returns they make oninvestments in government bonds, although the decline was lowerthan the 11.5 percent drop absorbed by men, Moneyfacts said. Some analysts warn annuity rates could fall further ifBritain's official inflation rate drops as a result of proposedchanges to way Britain's Retail Price Index is calculated. Alower inflation rate would cut the value of long-datedindex-linked gilts used by insurers to fund annuities payments. The Office of National Statistics is to producerecommendations on how the rate should be calculated onThursday. Britain's biggest annuity providers are Legal & General, Prudential and Aviva.