Here we provide a look at some standard conventional annuity rates and enhanced annuity rates. Although this website contains many examples of annuity quotes, on the standard annuity rates page, the smoker annuity rates page, and the enhanced annuity rates page, we thought it sensible to pull some of these together to provide a quick guide to the benefits of shopping around using the open market option for a better deal. The following quotes are based on 65 year olds with a £50,000 pension pot, after taking tax-free cash.
First, let’s consider a man who is fit and healthy and a non-smoker and looking for standard conventional annuity rates. He can buy an annuity paying £281 per month, and a woman would receive £263 per month. If, instead, these same people smoked on a regualr basis, they might qualify for smoker annuity rates, which produce a slightly increased annuity rate. A man would receive an annuity income of £331 per month, that’s £50 more each month than a standard quote, or 18% more, and a woman would receive £314 per month, that’s £51 more each month than a standard quote, or 19% more.
Now, if these people had a not too serious medical condition they could get a much higher annuity rate. Let’s say they had long standing well managed diabetes, and were taking medication which include some to control blood pressure and also cholesterol as well as diabetes specific medication, and recently had a stroke, but are now fully recovered and enjoying an active lifestyle. A man would receive an income of £345 per month, that’s £64 more each month than a standard quote, or 23% more, and a woman receives £325 per month, that’s £62 more each month than a standard quote, or 24% more.
Moving on, let’s look at an enhanced annuity quote for a very serious medical condition, which produces a significantly higher annuity rate. Let’s say that either life has been recently diagnosed with lung cancer, which has spread to the bones, having had a course of radiotherapy and currently in the middle of a course of chemotherapy. A man would receive an income of £695 per month, that’s £441 more each month than a standard quote, or 147% more, and a woman would receive £654 per month, that’s £391 more each month than a standard quote, or 149% more. These examples illustrate very clearly the benefits of using the open market option to shop around for the best annuity rates at retirement.
