It pays to be honest when buying an annuity

People over 50 could miss out on an enhanced pension annuity if they don’t disclose details about their health or lifestyle. According to Saga, although over 50s tend to be honest with insurance details, they tend not to be so truthful when buying an annuity. Saga reckons that 120,000 people in this age group are losing out up to the tune of £60 million.

As an example, it quoted a male over 50 who had been smoking 10 cigarettes a day for 12 years and found that this person see his annuity increase by up to seven per cent. By the same token, a female with type two diabetes could receive up to eight per cent a year. However, this can only be achieved if people are more honest about their details.

Andrew Goodsell, executive chairman at Saga, which is campaigning for better pension rights, said: "It is vitally important that people are frank about health conditions when they buy a pension annuity, as it can improve their income for the rest of their life."

By disclosing these details, over 50s in line for an average £30,000 pension pot could see this figure increase by £800 per annum.

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