The index is a new quarterly initiative tracking the income paid on standard and enhanced annuities. If shows that a man retiring at 65 with a pension pot of £50,000 would receive an estimated £3,575 extra for the first five years of retirement, or £715 each year, if he qualified for an enhanced annuity. This adds up to £8,580 more income than what he would receive from the average standard annuity if he lived to average life expectancy.
The corresponding figures for a woman retiring at 65 would be £3,405 for the first five years or £682 a year. If she were to reach the average life expectancy she would find herself £11,579 better off.
Craig Fazzini-Jones, director at MGM Advantage, says:”Many people close to retirement don’t realise that they can shop around for the best annuity rate and increase their retirement income by thousands of pounds. Last year, over 60 per cent of people buying an annuity chose the one offered to them by their pension provider.
“The other problem is that many people approaching retirement feel fit and healthy and wouldn’t consider that they could qualify for an enhanced annuity. Lots of medical conditions are covered, from the very minor to severe impairments. Indeed, there are well over 1,000 medical conditions such as high cholesterol or high blood pressure that could be covered.”