• Press releases
  • A quarter of over 50s incorrectly think that annuities give the best rates to people without underlying health conditions
  • When asked whether it is true or false that annuities give the best rates to those without underlying health conditions, 25% of over 50’s incorrectly said it is true
  • Over half (57%) of over 50s said they did not know
  • This is despite 95% of over 50s saying their current health is at least somewhat important to them when deciding what to do with their pension pot
  • Over a fifth (21%) with a DC pension or SIPP would consider taking out an annuity due to their own ill health

A quarter (25%) of over 50-year-olds incorrectly think that annuities give people without underlying health conditions the best rates, according to research from Standard Life, part of Phoenix Group. When asked to answer whether it is true or false that annuities give the best rates to those without underlying health conditions, just 18% of over 50’s acknowledge that this is false. This means that many may miss out on the best deals in retirement due to confusion and lack of understanding around enhanced annuities, which can provide better rates.

Having a health condition can make certain insurance products, like life insurance, more expensive. However, enhanced annuities provide a more generous income depending on lifestyle factors, as well as the severity of various health conditions. The research, which explored overall knowledge of annuities amongst the over 50’s, revealed that over half (57%) said they didn’t know when asked whether it is true or false that annuities give the best rates to those with no underlying health conditions.

Almost all (95%) of over 50s say their current health is at least somewhat important to them when deciding what to do with their pension pot. A further quarter (26%) said they annuitised or will annuitise some of their pension savings because of a pre-existing medical condition that will make decision making difficult for them in later life. Improved education and advice on how enhanced annuities can benefit those with health conditions is therefore vital, especially given over a fifth (21%) of over 50’s with a DC pension or SIPP would also consider taking out an annuity if they fell into ill health.

Examples of annual income for a Standard versus Enhanced annuity** (using specific circumstances):

Example and details of conditions Pension pot size Standard annual income Enhanced annual income
Male, age 65
High blood pressure and high cholesterol – diagnosed at age 55		 £170,000 £11,735 £12,043
Female, age 67
Type 2 diabetes – diagnosed at 45 		£125,000 £9,416 £10,238

Pete Cowell, Head of Annuities at Standard Life, commented: “It is often assumed that having a health condition makes insurance products more expensive. However what many people don’t realise is that enhanced annuities can often provide a more generous income to those suffering from health conditions or shorter life expectancy. With annuity rates having risen significantly over the last year, the value and security they offer makes them hard to overlook, especially for those with health conditions.”

“Health and life expectancy are key factors that inform decision-making around savings and people’s retirement plans. This research clearly demonstrates that people should be made more aware of the benefits and additional income they may be entitled to. Greater emphasis on high quality advice and guidance is therefore more important than ever to ensure people of retirement age understand the range of annuities available to them. Options such as enhanced annuities can often provide good customer outcomes that better suit people’s health concerns and needs in retirement.”

ENDS

Enquiries

Jennifer Smallwood
Senior PR Manager
Standard Life, part of Phoenix Group
07858 367818
Jennifer_Smallwood@standardlife.com

Samantha Griffith
PR Consultant
Standard Life, part of Phoenix Group
07752 465345
Samantha_Griffith@standardlife.com

 
Notes to Editors

*The research was commissioned by Standard Life and conducted by Opinium, with a nationally representative sample of 2000 over 50 years old, between 6th- 14th March 2023.
**Annuity rates taken on 21st September 2023

About Standard Life 

  • Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years 
  • Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension scheme.
  • Standard Life is part of the Phoenix Group, the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together
  • Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
  • We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about.
  • The value of investments can go down as well as up, and may be worth less than originally invested. 

Share via

Press releases