You are here: Home - Retirement - Retiring now - News -

Three quarters of pensioners miss out on extra retirement income

Written by: Paloma Kubiak
Thousands of over-55s miss out on extra pension income by not declaring medical conditions or lifestyle choices, research reveals.

Poor health, as well as smoking and drinking, can actually increase the amount of money retirees receive from an annuity – an insurance product that pays a guaranteed annual income for life in exchange for some or all your pension pot.

But 76% of over-55s don’t know about ‘enhanced annuities’, meaning they could potentially be missing out on thousands of pounds in retirement income.

The reluctance to disclose this information comes from people’s experience buying other types of insurance products, according to research by Legal & General.

A survey of more than 2,000 people over-55 found that one in 10 think ill health will reduce pension pay outs, while one in five think it won’t make a difference to how much they get in retirement.

A further 5% believe that telling an annuity provider about a medical condition would mean their application is rejected.

Emma Byron, managing director at Legal & General, said customers are confused about how annuities work.

“People with health conditions, as well as smokers and drinkers, stand to benefit from better annuity rates – but only if they disclose everything to their financial adviser or annuity company. First and foremost, we need to help customers understand the potential benefits of annuities, which offer them a guaranteed income for life.

“Part of that is about education and information – but it’s also important that our industry talks plainly to consumers, removing the jargon and explaining the options available in a clear and helpful way. Just 26% of retirees have taken out an annuity, but there are thousands more who could benefit from a guaranteed income.”

Related: See’s Could you qualify for an enhanced annuity (and not know about it?) for more information.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Test and Trace £500 payment scheme extended

Low-income workers required to self-isolate will be able to claim a £500 support payment until the end of Marc...
Test and Trace £500 payment scheme extended

‘No need’ for stop-gap payments for new Universal Credit recipients

The government said “there is not a need” for an earlier allowance for new Universal Credit claimants despite...
‘No need’ for stop-gap payments for new Universal Credit recipients

Santander to halve interest rate on its 123 current account

Santander is yet again making changes to its 123 current account, this time halving the interest rate, though...
Santander to halve interest rate on its 123 current account

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week

Read previous post:
negative interest rates
One-year bond rates at near three-year high

If you can afford to tie your savings up for a short period, it may be a good time to...