Enhamced Annuities - Get Up to 40% More Annuity Income
At least one in three of us could be eligible for a higher income when we retire, purely because we’re considered to have shorter-than-average life expectancies. An enhanced annuity works on the basis that, if you have existing medical conditions or certain unhealthy habits, you will probably have a shorter lifespan than someone in a better state of health.
In essence, an enhanced annuity allows you to use up your pension fund more quickly by giving you access to more money each year. Because those who are in a good state of health at the time of taking out the annuity are, statistically speaking, likely to live longer, the company providing the annuity stands to benefit financially from providing annuities to those with shorter life expectancies.
Enhanced annuities provide bigger pension payouts over a shorter period of time for those with serious medical conditions or with negative lifestyle factors, such as those linked to weight, smoking or occupation. They were first introduced in the UK in 1995 and have rapidly gained a substantial market share in the annuities field. The range of products on offer includes annuities for serious medical conditions, annuities for smokers, and annuities enhanced as a result of lifestyle factors such as weight or occupation.
How much extra income could you receive from an enhanced annuity?
To help boost the pension incomes of those who have below-average life expectancy, insurance companies offer enhanced annuities. This type of annuity pays out a higher income to people who the insurance company judges to have shorter life expectancies. You may qualify for an enhanced annuity if:
- You are overweight, have high blood pressure or high cholesterol – you could receive around 7% more income than someone without these medical conditions
- You are a smoker – if you have smoked more than 10 cigarettes a day for the past decade or more, you could receive up to 16% more income than a person who has never smoked
- You have recently been hospitalised for a medical condition – serious illness can lead to an increase in income of up to 20%
Make sure you get the best enhanced annuity deal for you
When shopping around for the best enhanced annuity, consider the following points:
- Enhanced annuity providers vary, and there is no single best option that suits everyone. For this reason, it’s essential to shop around for the best deal. Use our free annuity calculator to find the best deal for you.
- Be honest with your annuity adviser when it comes to your health and lifestyle – many of us are used to trying to downplay our health conditions or unhealthy habits, but when it comes to enhanced annuities, they can be positively beneficial. So, make sure your adviser gets the full picture of your medical history, smoking and drinking habits.
- If you have a serious, specific medical condition, you may qualify for an impaired life annuity, which could offer even higher income than an enhanced annuity. If you believe this may apply to you, it could be a good idea to seek independent financial advice.
To compare a wide range of annuity options and find the one that’s right for you, use the comparison tables below:
Important Risk Information:
This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.
Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.