Poor health could benefit retirement pension

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Financial Services > Pensions > News

Poor health could benefit retirement pension

Tue, 02 Aug 2005

Lying is bad for your finances, and telling the truth could boost retirement pension, new research suggests.

According to Moneyfacts research, people who lie about their health status when applying for their retirement pensions lose out on thousands of their retirement pension funds.

Because they lie about being smokers or suffering from certain illnesses, many people do not have the option to take out enhanced pension annuity to supplement their retirement pension.

Moneyfacts estimates that income from retirement pensions can be boosted by as much as 25 per cent if people qualify for enhanced pension annuity when they reveal their true state of health.

The financial data specialists said people fail to apply for the enhanced pension annuity option because there is a lack of awareness and also a fear of admitting to an illness.

Enhanced pension annuities pay more out to people who have health risks. This is because these people are not expected to live as long as others.

The Annuity Bureau's Peter Quinton, business development manager, noted that smokers live an average five years less than non-smokers, "so it naturally follows that they will get a better rate of return".

Only a fifth of all annuities are enhanced pension annuities. However, Moneyfacts found that up to 40 per cent of people qualify for these products.

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