5 key statistics - The "killer" stats most pension companies won't show you:
Where retirement savers seek advice, guidance or support from an annuity specialist nearly half will receive an enhanced annuity.
Where retirees just "tick the box" and take the annuity offered by their pension provider, they are far more likely to receive a standard annuity.
According to MGM Advantage, the specialist annuity provider, the difference between the best enhanced rate and the worst published conventional annuity rate is 55.2% for males & 52.2% for females.
MGM research also suggests approximately 60% of retirees would qualify for a higher income based on their health and lifestyle.
Only 2% of consumers who take the annuity offered by their pension company or seek further guidance from a specialist end up purchasing an enhanced annuity.
The ABI agrees....
The latest ABI research illustrates the benefits of "shopping around" for the best deal available. Their data shows that just over 40% of sales were for enhanced annuities & nearly 42% for conventional annuities (By premium). Significantly as recently as 2004 only 10% of sales were classified as enhanced and the trend is set to continue.
Worryingly where retirement savers sought no guidance, 83% of sales were into conventional annuities.
Our 3 top tips for retirement savers:
1. Be prepared to do your homework, use the services available from advisers and annuity specialists to shop around.
2. Make sure you fully disclose your health and lifestyle choices. Annuity companies typically take 1,500 conditions into account and often medical conditions that may seem insignificant qualify for extra income and a much needed boost.
3. Don't settle for second best. In four out of every five cases shopping around will get you a better retirement deal than that offered by your pension company.
MGM think 60% qualify for an enhanced annuity when they retire.
The figures below from MGM research paper "The Retirement Nation" illustrate the medical conditions faced by the over 55s. All of these conditions could qualify for a retirement income boost by receiving enhanced annuity terms.
Blood Pressure - 40%
High Cholesterol - 33%
Diabetes - 12%
Heart Disease - 8%
Chronic Obstructive Pulmonary Disease - 4%
Heart Attack - 4%
Breast Cancer - 3%
Stroke - 2%
Prostate - 2%
Other Conditions Caused by Smoking - 2%
We recommend that you speak with an annuity specialist to help you to find the best UK annuity deals available.