Annuities: 7 unusual ways to qualify for an Enhanced Annuity


iStock_000012131139XSmallIf you are approaching retirement and looking to turn your pension pot into an income, there’s a fair chance you will be joining the thousands of other people each year who buy an Annuity.

Once you have rejected other retirement income options, such as Income Drawdown, it’s then a case of making sure you select the right Annuity options, spouse’s pension, guarantee periods and so on, and search for the best rate.

One of the ways to improve your Annuity rate is to find out whether your health, or other lifestyle factors, are sufficient for you to qualify for an Enhanced Annuity.

Find out if you qualify for an Enhanced Annuity by contacting one of our advisers

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Whilst illnesses such as high blood pressure, raised cholesterol, stroke, cancer and heart attack will nearly always qualify you for an Enhanced Annuity, as will smoking, drinking excessively or being significantly overweight, we’ve uncovered seven unusual ways of qualifying, which you or your Annuity adviser or broker might not know about.

1. Reformed smokers

If you’ve done the right thing and have successfully given up smoking, many Annuity providers will refuse to give you an Enhanced Annuity; even if you have previously been a heavy smoker for many years.

However, there is at least one Annuity provider who will consider giving an Enhanced Annuity to anyone who has given up in the past five years.

If you have given up smoking over the past few years, make sure you let your adviser or Annuity provider know, it might help to get you an even better rate.

2. Existing smokers

Most Annuity providers will only consider you for an enhancement if you smoke at least 10 cigarettes per day.

But we know that many people smoke less, perhaps because they are trying to give up, cut down, or are ‘social smokers’.

Whilst most won’t, at least one Annuity provider will look to offer an Enhanced Annuity to people who smoke just one cigarette per day.

3. Type of alcohol drunk

If you regularly drink more than the recommended weekly amount, it is likely you will qualify for an Enhanced Annuity.

But did you know that they type of alcohol you drink will make a difference? Beer and spirit drinkers can potentially get a better Annuity rate than wine drinkers.

Make sure you tell your Annuity adviser of the type of alcohol you consume; it could get you a few extra pounds of income each year.

4. Are you ‘tee total’?

As strange as it may sound, if you are ‘tee total’ and don’t drink, this could also qualify you for an Enhanced Annuity.

Again, make sure you tell your adviser or Annuity provider as much detail as possible about your drinking habits.

5. Education

Your level of educational achievement could also make a difference to your Annuity rate.

Of course this is a huge sweeping statement, but like it or not it’s the way some Annuity underwriters think and you should try and take advantage of it, to get a better Annuity rate.

6. Type of work done during your working life

If you have predominantly performed manual work during your life, you are more likely to qualify for an Enhanced Annuity, than if you performed a clerical or administrative role.

Indeed, one Annuity provider told us that if you have been in a manual job for more than 25% of your working life, there is a link to musculoskeletal disorders.

7. Parents and grandparents

If you have ever applied for life insurance you’ll have been asked about the health of your parents and it may have affected the cost of your own cover.

Very few Annuity providers ever ask about your parent’s state of health, but with at least one provider it can make a difference, especially if they have died at a relatively young age.

Make sure your adviser asks about all of these

Once you have decided an Annuity is the right option, you need to choose your provider carefully. If you make the wrong decision it can never be changed.

Considering these seven factors, as well as other medical and lifestyle conditions, will get you the best possible Annuity rate.

An experienced and knowledgeable adviser or broker will ask about all of these things; if they don’t perhaps you are talking to the wrong person?

Our team of Independent Financial Advisers are experienced in developing retirement income strategies for clients the length and breadth of the UK.

If you are approaching retirement and would like advice on your options call one of our IFAs today on 0115 933 8433, alternatively enquire online or email