Why being honest about your health could maximise your retirement income

11 December 2018

Worrying new research from Legal & General reveals that up to 75% of over 55s wrongly assume medical conditions or their lifestyle will reduce their retirement income. In fact, the opposite is often true. When buying an annuity, it is likely that declaring medical or lifestyle issues will increase the return you get from your pension pot.

In a recent Money Observer article, Emma Byron, Legal & General’s Managing Director, Retail Retirement Income, was quoted: “People with health conditions, as well as smokers and drinkers, stand to benefit from better annuity rates – but only if they disclose everything to their financial adviser or annuity company.”

Being honest about your health and lifestyle could qualify you for an enhanced annuity. Relevant factors can include relatively moderate matters like high cholesterol, smoking, excess weight and alcohol consumption, as well as more serious conditions such as cancer and heart disease.

This table* shows the estimated increases in annual annuity income where the standard income would have been £5,000:

Even living within certain postcodes or having a career in some industries can also mean you qualify for an enhanced annuity.

This all stems from the fact that annuity providers use the information provided by applicants as a guide to likely life expectancy. If the provider gathers information that suggests someone might have below average life expectancy, they can offer a better annuity rate that means more regular income than a standard annuity.

Make sure your medical and lifestyle history is understood

Enquirers to Retirement Line are made fully aware of the availability of enhanced annuities and are asked the right detailed questions to ensure they receive the highest enhanced rates.

With regular underwriting training, our annuity specialists’ knowledge and experience ensures over 80% of our 2,000 monthly enquirers interested in a lifetime annuity qualify for an enhanced rate, whereas the national average is estimated to be 60%.

Please contact us on 0800 652 1316 or info@retirementline.co.uk if you would like to find out if you are eligible for an enhanced annuity, and what the best rate would be.

*Source: all enhanced quotes from Retirement Line's portal on 25 June 2018.