Over 4 in 5 retired annuity holders who would probably qualify for an enhanced annuity don’t at present have one, in accordance with new analysis.
Annuities have turn into more and more well-liked as a result of rising charges however many who maintain them don’t absolutely perceive how they work.
Near half (47%) of retired annuity holders who would probably qualify for an enhanced annuity have no idea they exist, in accordance with analysis from insurance coverage and investments supplier Authorized & Common.
Solely 4% of the over-50s surveyed who deliberate to get an annuity, or had been contemplating one to fund their retirement, had been contemplating an enhanced fee annuity.
Enhanced fee annuities supply larger funds for people who find themselves assessed as being more likely to face well being issues later in life which may shorten their lifespan.
Lorna Shah, managing director of retail retirement and CEO of Authorized & Common Dwelling Finance, mentioned: “Regardless of annuities changing into more and more well-liked, not sufficient folks perceive the nuances of how they work.
“Annuities are primarily based on common life expectations – the longer you might be anticipated to dwell, the extra the supplier expects to must pay out, so the decrease your fee. The flipside of that is, in case you have well being or life-style circumstances which point out your life expectancy is perhaps beneath common then chances are you’ll qualify for what known as an enhanced annuity, which has the next fee.
“This uplift in fee for individuals who would possibly face well being issues later in life, may actually be put in the direction of care or assist for these well being wants.”
• Opinium Analysis surveyed 3,000 adults over the age of fifty on behalf of Authorized & Common between 4 and 26 January. Of those 1,766 had been at present in retirement.
