Poor health and lifestyle can be good news if you’re buying an annuity, says Punter Southall Aspire
Poor health and questionable lifestyle choices offer few advantages, except when it comes to buying an annuity.
New research[i] has revealed that a quarter of over 50’s wrongly believe annuities offer the best rates only if you’re in great shape.
Just one in five know the opposite to be true: that if you have conditions considered to be life-shortening, annuities are generally more generous.
Steve Butler, CEO at Punter Southall Aspire, says, “Annuities work in a different way to how you might expect. Bluntly, poor health and lifestyle almost always add up to a shorter lifespan.
“What are known as enhanced annuities reflect this, giving you more money that can be a welcome boost in retirement. It’s a sensitive subject but, at the same time, a financial reality which you need to know about, especially as annuity rates are at their highest in the last two decades[ii].
According to Which? enhanced annuity rates were between 7% and 15% higher for an overweight smoker with high blood pressure and cholesterol, based on an annuity quote in November 2022[iii].
Which? also points out that someone with type 2 diabetes could see their income boosted by 30%.
Steve added: “Knowing every rate on offer is essential, healthy or not, as the difference in income can vary significantly. Pension Potential provides an independent overview of every deal and takes into account health and lifestyle.”
Pension Potential is free to employers and free for employees to use. It also shows drawdown, cash and hybrid pension options clearly and simply.