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Enhanced pension annuities

Q: I am retiring soon and have heard about being able to increase my pension income if I am in bad health. Is this true?

A: If you have a personal pension, you are likely to end up buying an annuity when you retire with the pension fund you have built up.

This will provide you with an income for life. However, certain conditions, such as high BP, diabetes and being a smoker, could result in a higher income because you can get a better annuity rate.

The reason for this is of course your shorter life expectancy. Such annuities are called 'enhanced annuities'.

Unfortunately many people are unaware of this, but as there are no disadvantages, you might as well mention any medical conditions when you apply for an annuity.

Also remember that in most cases, personal pensions has an 'open market option' where the pension company will look at a number of annuity providers, and find you the best possible deal.

Liz Willis

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