In its Missing Income report, the retirement specialist found that over 150,000 people could increase their income in retirement by taking an enhanced rather than a standard annuity.
Enhanced annuities can give people with certain medical or lifestyle conditions a higher level of income in retirement because enhanced annuity rates are calculated individually, based on the applicant’s personal circumstances.
LV= head of annuities Matt Trott says: “Financial advisers should always consider enhanced annuities when they write new business, so they can be sure they are meeting individual customers’ needs. This, plus more openness from people about their medical or lifestyle conditions, will help to ensure that the missing millions end up in the right place, the pockets of ordinary people who need to maximise their income in retirement.”
However, Trott says just 27,482 annuitants purchased an enhanced annuity in 2008, whereas LV= research shows that a further 150,000 people could have qualified for one.
A 62-year-old male could receive, for example, an extra £369 in income each year from an enhanced annuity, an increase of 22.7 per cent compared with the average income from a standard annuity. This could equate to an additional £7,380 over the rest of his lifetime.