Enhanced share has doubled in five years
Share
Sales of enhanced annuities rose by 24 per cent to £1.79bn last year from £1.4bn in 2008, according to figures from Towers Watson.
Its research shows sales hit record levels of £479m in the fourth quarter, up by 15 per cent on third-quarter sales of £416m.
Towers Watson says the market share of enhanced annuity sales as a percentage of total annuity sales has more than doubled since 2001 when the firm began its research.
Enhanced annuities now make up around a third of annuities sold in the open market. As a percentage of total annuities, not just those on the open market, enhanced annuities have 16.9 per cent market share.
Senior consultant Andy Sanders says: “Last year was another record year for enh anced annuity sales and means more consumers are benefiting from higher pension inc omes because of their medical condition or lifestyle. But a successful enhanced annuity market does have
imp lications. For those lives that do not qualify for an enhancement, average expectations of life will continue to lengthen which needs to be reflected in lower levels of pension income offered.”
MGM Advantage director of sales and marketing Aston Goodey says: “We are not surprised to hear that enhanced annuities now account for
around one in five annuities sold.
“The products offer fantastic value, paying out around 22 per cent more income each year compared against standard products. Awareness of enhanced products is on the up but too many people still take the first annuity offered without shopping around.”
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