Retirees told to consider enhanced annuities - Annuities - News - Moneyfacts


Retirees told to consider enhanced annuities

Retirees told to consider enhanced annuities

Category: Annuities

Updated: 27/10/2011
First Published: 07/09/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Too many people with an existing medical condition remain unaware that they could qualify for extra retirement income by taking out an enhanced annuity, according to a pension industry expert.

Despite recent figures suggesting sales of enhanced annuities are set to reach record levels this year, MGM Advantage believes that much work still needs to be done to bring the enhanced annuity message to the masses.

Enhanced annuities provide bigger pensions for those with serious medical conditions or with negative lifestyle factors, such as being overweight or a smoker, because these people are likely to have a lower than average life expectancy.

According to analysis of data by MGM Advantage, enhanced annuities currently pay an average of 23% more than standard annuities.

This means that over the course of retirement, a man eligible for an enhanced annuity with a £50,000 pension pot could find himself almost £13,000 better off than if he had a standard annuity.

More than three quarters (77%) of British adults aged 55 and over are unaware that certain medical conditions, such as high blood pressure, could entitle them to an enhanced annuity and potentially higher levels of pension income.

"While it is encouraging to see that enhanced annuities have experienced exceptionally strong growth, too many people remain unaware that they could qualify for extra retirement income as a result of an existing medical condition," said Aston Goodey, director of sales and marketing at MGM Advantage.

"As a result, they take the first annuity offered to them by their existing pension provider and fail to shop around even though it is one of life's biggest financial decisions."

Our annuity best buy tables reveal how the offerings from various annuity providers in the market compare.

We've also recently partnered up with Premier Retirement Services to provide you access to their online annuity planner service.

Choosing an annuity is likely to be one of the most important financial decisions you will ever make, so any time used researching the annuity market will most definitely be time well spent.

Find the best annuity for you - Compare annuities

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.

Related Articles

Secondary annuity market scrapped

The Government is cancelling plans for a secondary annuity market, citing concerns about consumer protection. Given there were fears that many could be ripped off – and that it wouldn’t be right for most – the decision has been largely welcomed.

2016 ILP Moneyfacts award winners announced

The winners of the 2016 Investment Life & Pensions Moneyfacts Awards were announced last night at a glittering ceremony held at the Lancaster London Hotel, amid much expectation and excitement.

2016: the worst ever year for annuity income

Tomorrow marks Pensions Awareness Day (PAD), yet our latest research doesn’t bode well for the sector – at least not for those seeking an annuity, with the data showing that annuity rates are on track for their biggest ever annual fall.