Guides
Enhanced Annuities
Find out how health and lifestyle details can increase your annuity income and why a full market search can make a meaningful difference.
Who could benefit?
As we age, the likelihood of being diagnosed with a medical condition increases. What many people don't realise is that these conditions can actually work in their favour when purchasing an annuity.
Past research indicates that around 70% of retirees could miss out on higher income by not exploring an enhanced annuity. Specialist providers consider your health and lifestyle in detail and pay more because of it.
Smoking Quick Facts
Smoking-related illness shortens average life expectancy, which specialist providers factor into the rate they offer.
- Over 10 million people smoke in the UK
- The average smoker smokes more than 12 cigarettes per day
- Over one fifth of the UK population smoke
- Enhanced rates apply to those who have smoked for 10+ continuous years
- Once the annuity is in force, you can quit smoking without any penalty to your income
How lifestyle affects your income
These are indicative uplifts your actual enhancement depends on your specific circumstances and the provider
Smoking
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Smoking 10 cigarettes a day could increase your pension income by over 21%. Enhanced rates apply to those who have smoked continuously for more than 10 years.
Being Overweight
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A BMI over 34 can qualify for an enhanced rate on its own. A BMI over 30, combined with another health factor, also qualifies. Over 60% of UK adults are classed as overweight.
Taking Medication
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Taking prescribed medication for conditions such as high blood pressure or high cholesterol could increase your pension income by over 6% and often much more in combination.
How and why do these factors increase pension income?
Traditionally, annuity rates were calculated using mortality tables actuarial data showing average age of death across the UK population. In more recent years, specialist providers recognised that individuals who smoke, drink heavily, or are overweight will on average die sooner. This led to the development of the enhanced annuity.
Beyond obvious lifestyle factors, other determinants of life expectancy are now considered including where you live and your past occupation. A retired foundry worker from an industrial town may statistically have a shorter life expectancy than an accountant in a rural area. Providers reflect this in the rate offered.
Perhaps surprisingly, even factors such as your level of education and the age at which your parents passed away can influence eligibility. An adviser will ask the right questions to ensure all qualifying factors are captured.
What lifestyle factors are considered?
While some factors may not qualify on their own, combinations regularly do. A postcode near a busy road plus a manual working occupation, for example, can unlock an enhanced rate even with no individual health condition.
3.9M
people in the UK suffer from diabetes
375,400
new UK cancer cases per year
113,000
people in the UK suffer a stroke each year
14.4M
adults in the UK have high blood pressure
Statistics are indicative. Sources: NICE, Cancer Research UK, Stroke Association, Blood Pressure UK.
Weight & BMI
How obesity can affect annuity income
A person classed as overweight or obese qualifies for a significant enhancement. People who are substantially overweight are statistically more likely to develop diabetes, heart problems, and certain cancers all of which can affect life expectancy.
A BMI over 30 can qualify when combined with another contributing factor such as high blood pressure. A BMI over 34 qualifies on its own. Over 60% of UK adults are classed as overweight, with around one quarter classed as obese.
Applicants with a lower BMI may not qualify unless they have additional medical factors. An adviser will assess your full picture and identify all applicable enhancements.
Not sure of your BMI?
Use the NHS BMI calculator
Don't leave money on the table
An enhanced annuity search takes minutes and costs nothing. Our advisers assess your full health and lifestyle profile across every specialist provider to find your highest available rate.
FAQ's
Everything you need to know about enhanced and impaired-life annuities