Enhanced annuities making themselves known

Category: Annuities
Date: 5/28/2009

People's awareness of enhanced annuities appears to be growing after it was revealed sales of the product have continued to expand.

Sometimes also referred to as impaired annuities,enhanced annuities provide bigger pensions to people with serious medical conditions or negative lifestyle factors such as smoking or weight problems.

According to a recent survey, UK retirees are missing out to the tune of £56 million by not taking advantage of such products.

It was also estimated that over 150,000 people could increase their retirement income by purchasing an enhanced annuity as opposed to a standard one, as rates are calculated individually and based on the applicant's personal circumstances.

According to Watson Wyatt, total sales in the first quarter of this year amounted to £443 million, an increase of 9.3 per cent on the previous quarter, and should grow further in the coming months and years.

"These forms of segmentation are good news for consumers as they provide more options with which to maximise their income from pension savings," said Andy Sanders, senior consultant at Watson Wyatt.