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Retirees urged to consider enhanced annuities

Retirees urged to consider enhanced annuities

Category: Annuities

Updated: 20/01/2012
First Published: 22/11/2011

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 It is now over 6 months old so the content may be out of date.

Thousands of retirees could be missing out on invaluable extra income in retirement because they are not taking advantage of enhanced annuities.

According to MGM Advantage, almost three quarters of people aged 55 and over are unaware that certain medical conditions could see them qualify for an enhanced annuity.

Qualifying conditions for an enhanced annuity include high blood pressure, high cholesterol, heart disease and diabetes, while higher payouts are also usually available to smokers aswell.

In the UK , some 40% of adults aged 55 and over have or have had high blood pressure, and 33% have had high cholesterol, both of which are conditions that might qualify them for a higher pension income.

On average, enhanced annuities pay out around 21% more than their standard annuity counterparts.

In terms of hard cash, for someone buying an annuity with a pension pot of £50K, this equates to a difference of around £2,775 over the first five years of retirement alone.

With living costs and longevity consistently rising, the retirement specialists have warned anyone approaching retirement to start thinking about their options early, to make sure they secure the most appropriate annuity.

"It is an unfortunate fact of life that as we get older, we are more at risk of getting underlying health conditions," said Aston Goodey, sales and marketing director at MGM Advantage.

"Those buying an annuity should have a health check and be sure to inform their annuity provider of any health conditions to see if they qualify for an enhanced annuity.

"The difference between a standard and an enhanced annuity can be significant and would make a real difference, particularly when the cost of living is squeezing finances.

"To ensure you are getting the best annuity rate possible, you should also exercise the Open Market Option and shop around for the best annuity rate."

Our new Retirement Planning service is the ideal starting point for anyone thinking about their life after work.

Quotes from different annuity providers, including enhanced annuities, can be compared right here.

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.

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