People approaching retirement have been urged to be honest with providers when purchasing an annuity as this can have a huge impact on the rate they'll be offered.
Research by MGM Advantage reveals that up to 70% of people approaching retirement could qualify for better annuity rates because of existing health or lifestyle conditions.
Yet despite this, one in twenty (5%) of retirees who'd already purchased an annuity admitted they either deliberately under-estimated habits such as smoking or drinking, did not declare medical conditions or said they were not at all honest with their provider.
"Although the majority of people are honest when filling in the forms to purchase an annuity, some people probably think being open about smoking, drinking or their weight will have a negative effect on the level of income they receive," said Andrew Tully of MGM Advantage.
"Nothing could be further from the truth. This is why it is vital people approaching retirement and considering their options are honest about any health or lifestyle condition they may have.
"This could have a significant and positive effect on the income they could receive from an annuity, as, on average, an enhanced annuity pays 23% more income than a standard annuity."
Top tips for maximising your retirement income:
• Always exercise your right to shop around for the best annuity rate before accepting the annuity offer from your pension provider. The difference in annuity rates between providers can be as much as 30%!
• Think about your partner and family, considering whether to provide for them when you die through a guaranteed period or joint-life annuity.
• Consider how long you will enjoy retirement, and think about how your spending pattern will change over that time along with how inflation might affect your income.
• Always be honest with your annuity provider - you might qualify for a better rate because of medical or lifestyle conditions.
• Seek independent financial advice to ensure you choose the best option or options for your individual needs.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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