Almost 3/4 of people aged 55+ could miss out on additional income in retirement
Only 28% of people aged 55 and over are aware that certain medical conditions could entitle them to a higher level of retirement income
Nearly three quarters (72%) of UK adults aged 55 and over are unaware that certain medical conditions could entitle them to a higher level of pension income through their annuity provider, according to new research¹ from MGM Advantage.
The retirement income specialist also reveals that 70% of retired people are potentially missing out on a higher income in their retirement because they are not taking advantage of the higher income offered by providers if they have underlying health conditions which would qualify them for an enhanced annuity. Qualifying conditions for an enhanced annuity include high blood pressure, high cholesterol, heart disease and diabetes.
Furthermore, 71% of employed people aged 55 plus are also unaware that certain medical conditions could entitle them to a higher level of income once they have retired, says MGM Advantage. Nearly four in five (78%) women 55 plus and nearly two thirds (65%) of men 55 plus fail to understand that they could be eligible for higher income levels in retirement. These are people who are fast approaching retirement and should already be thinking about their retirement income options, especially when living costs and longevity are consistently rising.
Aston Goodey, Sales and Marketing Director, MGM Advantage comments,
“It is an unfortunate fact of life that as we get older, we are more at risk of getting underlying health conditions. Those buying an annuity should have a health check and be sure to inform their annuity provider of any health conditions to see if they qualify for an enhanced annuity. The difference between a standard and an enhanced annuity can be significant and would make a real difference, particularly when the cost of living is squeezing finances.”
MGM Advantage is urging people nearing retirement to have a health check for their own good as well as to potentially benefit from any underlying health condition. Indeed, 40% of UK adults 55 and over have or have had high blood pressure and 33% have had high cholesterol, both of which are conditions which could qualify them for a higher pension income.
However, one in seven (14%) over 55’s still working said it had been more than five years since they last had a health check with a further 11% not able to remember when they last had a test. This group should ensure they have a health check before retiring and buying an annuity.
Goodey continues, “Clearly more needs to be done in terms of educating those both in and approaching retirement. More information needs to be provided about the benefits of enhanced annuities for those with medical conditions. To ensure you are getting the best annuity rate possible, you should also exercise the Open Market Option and shop around for the best annuity rate.”
The retirement income specialist warns that people who do not mention any underlying health issue could risk losing out financially as enhanced annuities pay out on average 20.68% more for men and 22.15% more for women. For the first five years of retirement for example, the difference between the amount paid out by an average standard and enhanced annuity is £2,908.30 for a man buying an annuity with £50,000, and £2,642.30 for a woman2.
¹The research was conducted online by Research Plus between 7th and 17th October 2011 with 2086 UK adults aged 55 years and over of which 1261 were retired and 825 non retired
²According to stats from the MGM Advantage Annuity Index September 2011