The firm says more than 150,000 people who qualified for an enhanced annuity last year bought a standard annuity instead, missing out on an average 22.7 per cent more income each year.
Despite the UK enhanced annuity market growing by one-third in 2008, the number of people buying enhanced products is a long way short of the four in 10 that LV= estimates could qualify for a higher ann-ual income in retirement.
Head of annuities Matt Trott says: “More people are taking up the open market option, which allows them to buy an annuity from the most suitable provider for them. But thousands of annuitants are still missing out on a higher income in retirement. Given the economic climate, people cannot afford to miss out.”