Smoker; Annuity Rates Enhancement

This applies to both a pension and purchased life annuity. There are a number of factors relating to health or lifestyle that mean an individual could benefit from an enhanced annuity, resulting in a significant increase in the pension income or income from a lump sum in retirement. Although these people may be very healthy today, due to these factors their life expectancy is less than that of the norm.

If the annuitant smokes 10 or more cigarettes per day (or 3 ounces of cigarette tobacco per week) and has done so for the past 10 years, they could receive enhanced rates from a life company. Enhanced rates do not apply to annuitants that smoker pipes or cigars. If after being accepted on the enhanced terms the annuitant gives up smoking, the pension income will still continue at that rate for the rest of the annuitant's life.

If the annuitant has suffered ill health in the past that has reduced their life expectancy relative to the mortality tables, then again enhanced rates could be payable. If it is the annuitant's spouse that has suffered ill health, is a smoker or is overweight then whether pension annuities or a purchased life annuities the life companies could pay a higher income based on a joint life annuity.

In addition life companies also consider the lifestyle and location of the annuitant. In particular, it the annuitant has been a manual worker for most of their working life of live in a particular part of the country, an enhanced annuity could be payable. Before qualifying for enhanced terms it is likely that the life company will ask for General Practitioners Report (GPR) from the annuitant's doctor to verify the medical conditions before an enhanced income can be paid.

Annuity Rates Table - Smoker, Single Life

Fund size: £100,000 (after taking £33,333 tax free cash)

The following pension annuity rates table shows the best open market option income for a compulsory purchase annuity. The original pension fund is £133,333 and after the tax free lump sum has been taken, £100,000 is used to purchase an annuity.

The annuity is paid monthly in arrears and compared on a level annuity, 3% escalation, and level with 10-year guarantee basis for single males and females from the ages of 50 to 74 years. No medical enhancements are included in these rates.

Smoker - Level Annuity
male 50	£5,652	female 50	£5,472
male 55	£6,216	female 55	£5,940
male 60	£7,044	female 60	£6,612
male 65	£8,304	female 65	£7,584
male 70	£10,248	female 70	£9,072
male 74	£12,720	female 74	£10,920
Smoker - Level Annuity, 10-year Guarantee
male 50	£5,616	female 50	£5,436
male 55	£6,144	female 55	£5,880
male 60	£6,888	female 60	£6,492
male 65	£7,896	female 65	£7,320
male 70	£9,156	female 70	£8,436
male 74	£10,188	female 74	£9,456
Smoker - 3% Escalation
male 50	£3,732	female 50	£3,516
male 55	£4,320	female 55	£4,020
male 60	£5,172	female 60	£4,728
male 65	£6,432	female 65	£5,712
male 70	£8,364	female 70	£7,188
male 74	£10,800	female 74	£9,012
Annuity table - the smoker annuity rates shown are based on a purchase of £100,000 and should be used as a guide only. For an annuity rate specific to your circumstances you should ring 01480 451412 for a quote..

Annuity Rates Table - Smoker, Joint Life

Fund size: £100,000 (after taking £33,333 tax free cash)

The following pension annuity rates table shows the best open market option income for a compulsory purchase annuity. The original pension fund is £133,333 and after the tax free lump sum has been taken, £100,000 is used to purchase an annuity.

The annuity is paid monthly in arrears and compared on a level annuity with 50% spouse benefit on death, level with 100% spouse and 3% escalation with 50% spouse basis. No medical enhancements are included in these rates.

Last updated: 21 December 2006
  

Contact us today for a free annuities enhancement consultation