We have recently noted that enhanced annuities are becoming increasingly popular according to sales figures emerging from the pension industry. This is, in general terms, considered to be a good thing as it means more retirees are getting the annuity they are entitled to, not the one that suits there current pension provider.
Recently some industry experts have been giving they’re assessment as to why the sales of enhanced pension annuities have been rising. Vince Smith-Hughes who works for Prudential puts the increase down to better availability, more diversity in the product and increased awareness of enhanced rates by both annuitants and the people advising them. However it should be noted that not every enhanced annuity product is the same and that there is likely to be a broad range of choice between each provider. Thus, it is argued that those advising annuitants should consult as many annuity providers as is possible to ensure they get the best deal for their client.
As well as speaking to lots of providers, those who are eligible for enhanced rates should also be aware that they can get enhanced terms from several types of annuity, not just conventional annuities. For example, enhanced rates can be sought from asset-backed annuities such as unit-linked or with-profits annuities. The downside is with more people taking enhanced rates, rates for the healthy fall.
As well as greater availability and awareness, the application process has been streamlined but has also paradoxically managed to cover more medical conditions. If you do have an illness or lifestyle condition that impacts on life expectancy then the news from the annuity industry is encouraging. If you are fit and well then the chances are your rates may start to suffer.
