Two-thirds of people could be eligible for an enhanced annuity - thereby boosting the amount of guaranteed income they receive in retirement.
How much could you get with an enhanced annuity?
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Two-thirds of people could be eligible for an enhanced annuity - thereby boosting the amount of guaranteed income they receive in retirement. If you have a medical condition such as high blood pressure or obesity, you could be missing out on thousands or even tens of thousands of pounds worth of extra income over the course of your retirement if you simply buy a default, vanilla annuity. According to retirement specialist Partnership, one of the biggest income boosters is also one of the more common habits - smoking. While an average healthy person could buy an annual income of £5,400 with a pot of £100,000 - which would amount to a total of £107,998 over 20 years - someone who smokes could rake in £6,448 per year from the same pot, amounting to £128,952 over two decades of retirement. Shop around This cheery bit of news has a dark side - the reason you can enjoy a higher income if you have a medical condition is because you are likely to die sooner, and therefore the annuity provider reckons it's a safer bet to pay you more every year. Below, we've listed some of the more common health conditions and how much income someone with each could expect to receive from a £100,000 pot. To find out if you might be eligible for an enhanced annuity you can fill out the form found on the Retirement Health and Lifestyle forum. "Under the new pension freedoms, people do not have to take out an annuity, but many people still want a guaranteed income for life," says Mark Stoppard, head of protection at Partnership. "An annuity remains one of the best ways in which people can secure this benefit, so if people do want to take out one of these products they deserve to get the highest income possible. "Shopping around and looking at whether they are eligible for an enhanced annuity will ensure that they get a better deal than they might have if they stayed with their existing provider." In light of the new pension freedoms, which came into effect this year, Hargreaves Lansdown's Tom McPhail says the experience of his firm so far suggests 88 per cent of people who buy an annuity are qualifying for enhanced income.
Source Moneywise http://ift.tt/1SBb66Y
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