Enhanced annuity rates can apply to your retirement income if you suffer from some of the many types of ill health. You could get a much bigger income because of this, as you are expected to have a lower than average life expectancy. What follows are some examples of medical conditions of differing degrees of severity, and the annuity quotes that might apply to each. These quotes are shown against two reasonable benchmarks: leading standard quotes and the lowest published quotes from the FSA’s own comparative tables, and the quote you have from your existing pension company might well lie somewhere between the two. These examples are all based on 65 year olds with a £50,000 pension fund.
Medical Condition: Long standing but well managed diabetes, and taking medication which include some tablets to control blood pressure and cholesterol as well diabetes related tablets. Recently had a stroke, but now fully recovered and enjoying a pretty active lifestyle.
Male Female
Annuity quote (p.a.) £4213 £3969
(A) Monthly equivalent (p.m.) £351 £332
% return / approx annuity rate 8.4% 7.9%
(B) Leading standard quote £298 £280
% difference (A) to (B) 17.8% 18.7%
(C) FSA lowest published quote £257 £238
% difference (A) to (C) 36.6% 39.2%
Medical Condition: Recently been diagnosed with lung cancer which has spread to the bones and has just had radiotherapy and is currently in the middle of a long running cycle of chemotherapy.
Male Female
Annuity quote (p.a.) £8434 £7935
(A) Monthly equivalent (p.m.) £704 £661
% return / approx annuity rate 16.9% 15.9%
(B) Leading standard quote £299 £279
% difference (A) to (B) 136% 137%
(C) FSA lowest published quote £257 £238
% difference (A) to (C) 174% 178%
Looking at these, you can certainly tell, especially from the latter, that much higher annuity rates are obtainable if you have a serious case of ill health. All you’ve got to make sure you do is inform your adviser properly, and that way you can get what you’re entitled to; a much higher retirement income!