Research from Legal & General Retail has revealed that 84% of retired annuity holders who would likely qualify for an enhanced annuity do not currently have one. The research also revealed that 47% said they did not know enhanced annuities existed.
Further, only 4% of those who plan to get an annuity or are considering one to fund their future are considering an enhanced rate annuity.
Lorna Shah, Managing Director, Retail Retirement and CEO of Legal and General Home Finance: “Despite annuities becoming increasingly popular, not enough people understand the nuances of how they work.
“Annuities are based on average life expectancies – the longer you are expected to live, the more the provider expects to have to pay out, so the lower your rate. The flipside of this is, if you have health or lifestyle conditions which indicate your life expectancy might be below average then you may qualify for what is called an enhanced annuity, which has a higher rate.
“This uplift in rate for people who might face health problems later in life, could in fact be put towards care or support for those health needs.”
