REDHILL, England, August 13, 2012 /PRNewswire/ --
Individual circumstances like health, lifestyle and postcode can mean extra pension annuity income.
The average life expectancy of men and women has traditionally been a key consideration for governments and pension annuity providers alike when calculating retirement incomes in the UK. But with gender legislation affecting the pricing of annuities from December 2012 and annuity providers focussing more on individual life expectancy in recent years, it has never been so important for people to shop around and disclose their health issues to help maximise retirement income.
The vast majority of people in the UK buy a pension annuity with their pension savings to provide them with an income for the rest of their life. In exchange for a customer's pension fund, annuity providers take on the risk of paying an income for life, no matter how long they live, so accurately estimating their life expectancy is crucially important. Women tend to live a few years longer than men, so annuity providers tend to offer them lower annual incomes because, on average, they expect to pay this income for longer.
However, new gender legislation coming into effect in the UK later this year will prevent annuity providers offering customers different rates and incomes based on gender. Tim Gosden, Head of Annuity Product Development at Legal & General, believes that the likely outcome of the legislation will be a reduction to the level of income offered to men but that this could ultimately accelerate the move towards individual pricing for pension annuities for the benefit of customers:
"Some annuity providers have been focussing on individual circumstances for a few years now to more accurately determine life expectancy by taking peoples' health and lifestyle into account. And once you start taking these factors into account, gender becomes less important in determining how long you'll live anyway.
Enhanced annuities offer extra income where certain lifestyle health risks or medical conditions apply. So it's important that annuity customers shop around and are more willing to provide more information about their health when getting quotes, to help ensure they don't miss out on extra income. In fact these days it is becoming more common place for financial advisers to ask all of their customers to complete medical questionnaires for the purposes of purchasing an annuity."
For a guaranteed annuity quote and to get an instant decision on extra income based on certain lifestyle health risks, call Legal & General on 0800-048-2445. We may record and monitor calls.
SOURCE Legal & General Annuities