According to Towers Watson, sales of enhanced annuities reached a record level last year. For 2009 the sales totaled £1.8bn, which was a rise of 24% on the 2008 figure of £1.4bn. The fourth quarter of last year was particularly strong for enhanced annuities, with sales of £478.8m recorded. This compared with third quarter sales figures of £415.8m. The company also disclosed that since 2001, the percentage of UK annuity sales that were enhanced has doubled. Andy Sanders who works for Towers Watson said that “…2009 was another record year for enhanced annuity sales and means more consumers are benefiting from higher pension incomes because their medical condition or lifestyle has been assessed and a lower than average expectation of life anticipated.”
Although on the face of it this would seem that more annuitants are getting the right annuity for them, it does mean that those who do not qualify for enhanced rates will continue to have to endure longer life expectancy and therefore very often, lower rates. It is also expected that the sales of enhanced annuities will continue to rise throughout 2010. At the moment they make up around one third of all annuities that are sold under the open market option.
Enhanced rates can provide a significantly higher pension income, so if you think you may qualify make sure you tell your current provider or any other provider you speak to when shopping around for the best deal.