Pension savers could be missing out on extra retirement income by failing to take out enhanced annuities, says MGM Advantage.
The pension specialist has found that three quarters of over 55s could be bypassing extra money because they aren’t aware that certain medical conditions entitle them to additional income.
An enhanced annuity works in the same way as a regular annuity, by paying you an income throughout your retirement, but it takes into account any health conditions you may have.
For example, if you suffer from a heart condition of are a smoker, you may be entitled to extra money, based on the assumption that you will not live as long as those deemed to be in good health.
MGM Advantage has calculated that 59 per cent could qualify for an enhanced annuity yet most people are not taking up this option with only one in four people (20% of women and 26% of men) aware that they could get more income when they retire if they suffer from certain medical conditions.
By declaring a health issue the difference between the amount paid out by an average standard and enhanced annuity is £3,823.50 for a man buying an annuity with £50,000, and £3,407.65 for a woman in the first five years of retirement.
Aston Goodey, Sales and Marketing Director, MGM Advantage said: “Having a health check before purchasing an annuity is vital, and if someone discovers they have a medical condition, it’s really in their best interest to inform their prospective annuity provider.
“To ensure you are getting the best annuity rate possible, you should also exercise the Open Market Option and shop around for the best enhanced annuity rate.”
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