Time to set aside the ‘stiff upper lip’
Clients willing to give up their medical history could find that translates into pounds in their pocket in retirement, says Paul Glynn, director of performance management, Partnership
Historically, the British have prided themselves on their ‘stiff upper lip’ which has essentially has translated into a nation who is fundamentally relatively private. While the advent of social media means that people are more comfortable sharing the intimate details of their lives [#deliciousdinner], most people are still a little ‘backward in coming forward’ with intimate details.
That said, over half (63%) of 40 to 70 year olds said they would be more than happy to disclose a wide range of personal, financial and lifestyle data if it gave them a better understanding of how long their retirement might last. This is excellent news for enhanced annuity providers as they use these details to medically underwrite policies to help people get an income which reflects their longevity.
And the difference can be quite significant! In July 2015, a 65 year old who used a £100,000 pension pot to purchase a lifetime income on the open market might expect to receive around £5,300. This is likely to be higher than if they had simply taken what their ceding provider offered but it is still lower than what they would have received if they declared a common medical condition like high blood pressure (£5,709) or were a smoker (£6,448).
One barrier to people shopping around for a better deal on the open market has generally been the perception that it is incredibly time consuming and difficult. However, The Annuity Provider Forum, in conjunction with The Annuity Exchange and Origo, has launched a new website to help people maximise their retirement income CLICK HERE
This contains the health and lifestyle form which people typically need to fill in as part of the enhanced annuity application process. While annuities are not the only choice nor are they right for everyone, a guaranteed income for life is valued by many so this can be useful as it allows people to gather the accurate lifestyle and medical information they need prior to visiting their intermediary.
With an estimated 65% of people eligible for an enhanced annuity, setting aside the stiff upper lip and revealing medical details can pay off in the long run.