Okay, so it’s bad for you, but smoking can lead to better annuity rates for your retirement income. Indeed, some smoke cigars at this time of year. However, not everyone has a simple view on this.

Some people are wondering; they don’t like the idea of being penalised at retirement for being a non-smoker, and are thinking about how long before they take a pension annuity do they have to start smoking to get the enhanced annuity rates?

There are rules: you will need to have smoked an average of 10 cigarettes a day over the previous 10 years. Therefore, taking up smoking the day before you retire will neither benefit your annuity rate nor your state of health.

Enhanced annuities are available to those with a combination of health conditions such as being slightly overweight, having raised blood pressure along with raised cholesterol, so this approach may work to boost retirement income for many people wanting to purchase a fixed stream of income.

If you are fortunate enough to be in a really healthy condition then simply by using the open market option (OMO) - gaining the most best annuity rates through shopping around rather than accepting what your pension company has to offer - can often result in considerable gains being achieved.

Get the best deal you can, whether you smoke or not.

Now that we have expanded both the information and range of services available via this website we need to know if it is right for you.

Is it better that we offer you more than just the chance to buy a pension annuity? Do you want to receive full advice? Might you be of a mind that face to face advice is right for this important time in your life? Is the website easy to use, or too complicated?

Whatever your views, let us know. Send an e-mail to enquiries@rightannuity.co.uk . Maybe we are missing something. If so, what?

We want to ensure that you, the customer, has in front of them what they need, and what you see with this improved website is just the start.

To previous site visitors, welcome back. To new site visitors, welcome. Over the past few weeks a great deal of work has been done on this website, including changing the strategic partner from Bank of Scotland Annuity Service to Origen Financial Services Ltd. Why? To offer you, the consumer, greater information and choice for your retirement planning needs.

Previously you could only access pension annuities through this website. Now, in addition, you can access information and advice on self invested personal pensions (sipps), income drawdown, phased drawdown, pension fund management, inheritance tax planning, and a whole lot more. There is a mountain of information to help you decide which route you should go down, backed up by Origen’s whole of market national presence. You can even get to see someone if you wish.

Take a good look at what is on offer, and be confident that we can really help you.

Make sure you shop around for your pension annuity because, once you’ve chosen it, you normally can’t change it. 

Christmas shopping this weekend? There’s a good chance you’ll buy something that’s not quite right for somebody. It could be that the item in question could be taken back, such as with Marks and Spencers. You can do the same with many financial products. You can always swap a badly performing unit trust, credit card or savings account for another if you have a mind to.

However, you cannoy do this with an annuity purchase, perhaps the most important financial product that you will ever buy. Thing is, if you buy the wrong annuity it could cost you dearly.

The number of people exercising their open market option, the right you have to shop around with your pension fund for the best annuity rates, has hovered around the 35-40% mark since the Financial Services Authority (FSA) took steps six years ago to raise awareness. Only 10% of retirees actually buy an enhanced annuity. This is a major concern as many people could be missing out on a significant boost to their retirement income. As an example, it is estimated that around 40% of people qualify for a so-called enhanced annuity.

These enhanced annuities are for people with unhealthy lifestyles, such as smokers, or those with health problems, such as asthma or more serious medical conditions such as Alzheimer’s, cancer or coronary heart disease. An enhanced annuity can pay an income for life that is twice as high as standard annuities.

Enhanced annuities, including “impaired life” annuities, offer a higher annuity income because life expectancy is substantially shorter than average and therefore the total paid out by the annuity provider will be less over the course of life in retirement. You don’t have to be seriously ill to qualify, but you will still receive more than you would from a standard annuity. In short, the more ill you are,  the more you get.

Annuity applications are rated against a points scorecard, and the more boxes you get a tick in the more annuity income you will be paid. A smoker might receive around 8% more, and people with a history of serious health problems will get substantially more.

Example: a 65-year-old male with a pension fund of £50,000 opting for a standard single-life annuity, could expect to get an income of £3,724 a year on current annuity rates. But if he was a smoker and opted for an enhanced annuity, he would get an income of £4,048 a year. A 65-year-old male with cancer could receive more than double that, £9,245.

Then there are postcode annuities, which vary according to where you live; higher rates for some parts of Glasgow, less for the home counties.

All this indicates that you really do need to understand your options. Take advice from experts. I’m pretty sure they can lead you to a better retirement income. And, don’t be put off by the paperwork…it’s worth it.

The Bank Base Rate is now at 2% and likely to go lower, and pensioners and others living off interest from bonds, bank deposits, and building society accounts are having a hard time. 

Many of the elderly are worried that they might have to start spending some of their savings, just to survive, and none more so than those coming up to the watershed age of 75 when they will be forced to buy a pension annuity with any money still in a personal pension.

At the moment, annuity rates are holding up well and are only marginally below what they were five years ago, in spite of increasing longevity and lower returns on bonds and gilts which back annuities. 

In January 2003, when the Bank Base Rate was 3.5%, a male aged 65 could expect an annuity income of £7,469 for a £100,000 investment while a female aged 65 could buy an annuity income of £7,345 for the same amount.  Today the same 65 year olds could purchase annuities showing an income of £7,740 a year for the man, and £7,320 for the woman.

Even though there may be a desire to rush out and buy that annuity, people should take time to consider the choices. Current annuity rates will come down further if the recent falls in interest rates we have seen feed through fully to the bond market. However, corporate bond yields have not declined as sharply as interest rates.  Corporate bonds rates are above gilt rates.

If you are worried about purchasing a pension annuity, don’t be. We have never known a UK annuity provider default. Even if they did you would have the protection of the Financial Services Compensation Scheme (FSCS) for up to 90% of the income without limit.

Don’t forget, better annuity rates are always available if you are a regular smoker or if you have health problems.  The top smoker rate for a man aged 65 for a £100,000 purchase price is £10,018 a year, compared with the non-smoker rate of £7,740.