Smoker annuity rates are available from certain insurance companies. They will offer you a higher rate if you are a smoker, with an enhanced annuity plan. This is because you will have a lower than average life expectancy. Criteria does vary, but as a guide if you smoke 10 or more cigarettes each day (or 3 ounces of cigarette tobacco each week) and have done so for the past 10 years, you might well be eligible. Smokers at retirement age do often suffer from certain types of medical conditions. This will result in even higher annuity rates.
These quotations are shown against two fair benchmarks: leading standard non-smoking annuity quotes and the lowest published quotes from the FSA’s online comparative tables, and the quote you get from your pension company might reasonably lie between the two. These figures demonstrate quite clearly the different levels of income that can apply and the range of quotes available, and are based on a £50,000 pension fund, after tax free cash.
Male Age 60 Age 65 Age 70 Age 74
Smoker quote (p.a.) £3596 £4021 £4621 £5302
(A) Monthly equivalent £300 £335 £385 £442
% return / annuity rate 7% 8% 9% 10%
(B) Leading n/s quote £268 £298 £343 £392
% difference (A) to (B) 11% 12% 12% 12%
(C) FSA lowest quote £229 £257 £291 £328
% difference (A) to (C) 31% 30% 32% 34%
Female Age 60 Age 65 Age 70 Age 74
Smoker quote (p.a.) £3464 £3826 £4328 £4872
(A) Monthly equivalent £289 £319 £361 £406
% return / annuity rate 6% 7% 8% 9%
(B) Leading n/s quote £253 £279 £315 £353
% difference (A) to (B) 14% 14% 14% 15%
(C) FSA lowest quote £216 £238 £277 £312
% difference (A) to (C) 33% 34% 30% 30%
If you’re a smoker, disclose the fact that you are when you research your annuity, and you could find yourself a much higher retirement income.
