“People seeking secure retirement income should be prepared to answer questions about their health and lifestyle or it could be costly,” said Stephen Lowe, group communications director at Just Group.
“The rules oblige financial firms to ask health and lifestyle questions in order to help shop around for the optimum product. They have until January 1st to comply but, frankly, retirees need to avoid firms that are delaying because they are not doing their job properly.
“This is not the time to be shy or embarrassed but to talk about your medical history, current state of health, give personal details such as height and weight, and talk about lifestyle including smoking history or alcohol consumption.
“We now have such sophisticated techniques for gathering and processing information on a host of factors that nobody is ‘average’ or ‘standard’. The details make a real difference to the amount of lifetime income available. Saying ‘I’ve never felt better’ is not going to give the insight needed to find the best deals.”
Financial Conduct Authority (FCA) research found that 39%-48% of pension savers buying a guaranteed income for life from their own pension provider may have been eligible for higher rates due to health history or lifestyle factors.
While retirees looking to buy secure lifetime income already have to be shown the difference between their own provider’s rate and the best rate in the market, it is only from today that they are obliged to ask about health and lifestyle and to use that information to generate a market-leading quote.
Just Group said that all pension savers considering taking income from their pensions, or reviewing the income they are currently taking from pensions, should fully disclose their health.
“Having an accurate idea of how much guaranteed income for life you can generate from a pension provides a good baseline for all other non-guaranteed options to be considered,” said Stephen Lowe.
He said that nearly 75,000 guaranteed income for life plans were sold in the 12 months to March 2019. 38% of them offered ‘enhanced’ rates due to health or lifestyle factors, but that is below the two-thirds Just Group’s own research reveals could be eligible.
He said consumers should take three key steps before accessing their pensions:
• Take the free, impartial and independent guidance from Pension Wise.
• Ensure the firm takes into account your medical history and lifestyle information ir order to personalise the quotes to your own circumstances.
• Go online to retirementhealthform.co.uk for the industry-standard form designed to capture all the information needed to optimise the income you are offered.
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