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Enhanced annuities

An enhanced annuity pays you a higher income than a conventional annuity because of your health or lifestyle conditions.

What is an enhanced annuity?

You usually get penalised for being in poor health when buying financial products; through higher premiums or a worse deal. But with annuities, a health condition can work in your favour…

Enhanced annuities work on the assumption that your life expectancy is reduced if you have certain medical or lifestyle conditions. Annuity providers see you as someone that they'll have to pay for less time than someone in a better state of health. Therefore they compensate you by paying you a higher income, essentially using up your pension pot more quickly. This higher income is paid for life, even if your health improves or you change your lifestyle!

Do you qualify for an enhanced annuity?

You don't have to be seriously ill to qualify, your life expectancy will be assessed based on health and lifestyle conditions to ascertain the seriousness of your impairment. Remember to be completely honest about the degree of your illness! The uplift you’ll get depends on the seriousness of the condition, but even If you smoke, are overweight, drink alcohol regularly or take any prescribed medication you could qualify for enhanced rates and more income.

Page last updated: Tuesday 19 July 2022