'Higher pensions for those in poor health' says expert

Monday, December 7th 2009

Advice from Saga Personal Finance says pensioners who smoke or have other health problems could get better annuity rates.

But consumers are missing out because they are too intimidated to shop around, says Ali Crossley, chief operating officer at the organisation.

"Certain health conditions can mean that people are entitled to a better rate on their annuity, and that in turn means that they would have a higher income for the rest of their life," said Ms Crossley.

Research by the company published on December 3rd surveyed 10,834 over-50s. It found that 40 per cent shop around for a better annuity rate, but 37 per cent would drive an extra 15 minutes to a cheaper supermarket.

Ms Crossley thinks the "crazy decision" not to shop around is because people who do not understand the system accept the first offer given to them.

She advises consumers to talk to more than one annuity provider and declare any health conditions such as Type 2 diabetes, which could lead to a better rate.

Currently 44 per cent of those surveyed use the Open Market Option which involves purchasing annuity from a separate provider, the research discovered.