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 Moneyfacts.co.uk 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."
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