Here’s what the new UK equality Code says about age and your insurance premiums

Britain’s new statutory equality Code confirms that insurers, banks and lenders can take a customer’s age into account when pricing or refusing a product, provided the information behind the decision is relevant and comes from a source it is reasonable to rely on.

The financial services exception covers a broad sweep of products.

The Code lists mortgages, annuities, current and savings accounts, cheque cashing, loans, overdrafts, credit and charge cards, debt advice and debt management, e-money services, equity release, credit scoring, spread betting and investment advice, and states that the list is not exhaustive.

Where a provider runs a risk assessment that takes age into account – deciding a motor or travel insurance premium, for instance – it can only rely on the exception if the information is relevant and reliably sourced.

Relevant information means actuarial or statistical data, future projections or a medical report. The Code states plainly that it cannot mean untested assumptions, stereotypes or generalisations about age.

Factors that bear on reliability include whether the data is up to date, whether it is representative, whether the collection method suits the purpose, and whether the actuarial or scientific community generally accepts it.

The Code illustrates the lawful side with a couple aged 60 applying for a 15-year mortgage.

The lender asks about their retirement plans and post-retirement income to assess the risk that they will struggle with repayments later in the term. Because that information is relevant and comes from the couple themselves, the lender can rely on the exception.

Where the exception stops

The exception never covers harassment or victimisation.

The Code gives the example of a woman in her 70s who reports suspected fraud on her credit card and whom the provider tells she is probably being forgetful and should get a younger relative to call.

That treatment is likely to amount to harassment related to age, and the financial services exception offers the firm no protection.

Where a firm refuses travel or motor insurance because a customer sits above the product’s upper age limit, a voluntary agreement between the government, the Association of British Insurers and the British Insurance Brokers’ Association obliges it either to refer the customer to a company that can help or to point them to a signposting service.

An equivalent agreement covers refusals of life, critical illness and income protection cover because of a pre-existing condition or disability.

The Code stresses that signposting does not by itself mean the insurer has complied with the Act or justified its refusal.

A parallel exception covers disability in insurance business, and it works the same way: the decision must rest on information relevant to the risk, from a reliable source, and the firm must act reasonably.

The Code’s example of unlawful practice is a motor insurer charging a man living with HIV a higher premium without any sound data on HIV or on his actual condition.

Age-based concessions remain lawful and need no further justification, so pensioner discounts and student offers stand.

The Code notes a limit: in its example of a hairdresser offering cheaper Tuesday cuts to pensioners, refusing an available Tuesday slot to a 40-year-old customer amounts to direct age discrimination unless the salon can justify it, because the concession is not the reason for the refusal.

Three further age exceptions cover package holidays sold to a particular age group, age-restricted sales such as alcohol, and residential mobile home sites.

The ban on age discrimination in services does not extend to under-18s.

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