Quit smoking and start the diet after you buy your annuity says My Pension Expert

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Annuity rates for smokers are around 20% higher than standard annuity rates meaning retirees should think carefully about when they kick the habit.

My Pension Expert
Anyone who smokes might well be advised to give up the habit only after they have bought their annuity, as smoking 10 cigarettes per day increases the annuity quote by around 19%.

The baby boomer generation are retiring in droves this year and numbers are expected to increase further in the coming years, but what they can expect from their pension funds in terms of income has plummeted in recent years, falling 8% in 2011 alone. With the economic outlook looking continually fragile and the prospect of a further interest rate cut and additional rounds of quantitative easing on the cards, rates are expected to fall even further.

This now means a retiree today can only expect about one third of the income from the same fund size compared to someone retiring in the 1990’s and staggering reduction that spells economic disaster for a whole generation.

Scott Mullen of http://www.mypensionexpert.co.uk annuity specialists said, “Now, more than ever, people need to shop around for their annuity quote and ensure that they give full details of any medical conditions or bad habits. Anyone who smokes might well be advised to give up the habit only after they have bought their annuity, as smoking 10 cigarettes per day increases the annuity quote by around 19%. The same applies for a planned diet as being overweight could also give an increase of around 17% so the diet should wait too.”

It’s not very often that bad health and bad habits can actually benefit someone, meaning people are generally less than honest when they are talking to their doctor about the amount that they smoke or drink. While life insurance and even travel insurances can cost more for those with bad health it is the direct opposite for annuities, so retirees should ensure they make details around health and lifestyle available when seeking an annuity quote.

The advent of enhanced annuities in recent years has seen annuity companies paying significantly higher incomes to those people who have medical problems past or present and even if people are fit and healthy now, their life style could earn them a higher rate. Surprisingly, around 50% of retiree still don’t shop around for their annuity and will lose out by around £1 billion of lost income in the process.

My Pension Expert is a company of Diploma Qualified Independent Financial Advisors who specialise in the at retirement market.

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