Affluent annuitants could lose out by almost 20% in ‘healthier’ post code lottery

24th July 2013

Better off retirees could be losing almost a fifth of their retirement income by not declaring their medical conditions to their annuities providers whi price them as healthier due to their affluent postcode.

Analysis by Partnership Assurance found that if you used house price as an indicator of wealth, those in more expensive areas typically received less from their pension pot than those in more modestly priced districts.

Standard or conventional annuities are often priced by postcode, as people living in more affluent areas are expected to be healthier and live longer and therefore get lower annuity rates.  However, it does not take into account medical conditions.

Some of the UK’s estimated 3.7 million diabetics live in a more affluent area could find that they receive up to 19% less from their pension pot.

With diabetes the most under reported medical condition according to Partnership’s actuaries, even those living in less affluent areas would find that they could gain an increase of 9% by speaking to their annuity provider.

Andrew Megson, Managing Director of Retirement, Partnership says: “Over 3.7 million people are living with diabetes in the UK and just by telling your annuity provider about this condition, people can get up to 19% more annual retirement income.  It is vital that when people start to prepare for retirement, they not speak to a variety of annuity providers but also take into account any medical or lifestyle conditions that they may have.”

It has also put together a sample of postcodes with certainly are viewed as having different levels of affluence below.

Borough/district or unitary authority

Average House Price

Annual Standard

Annuity

Income

Annual Annuity income impaired -Diabetic

Uplift

% increase

Kingston upon Hull, City of

£68,386

£1,847

£2,017

£170

9%

Stoke-on-Trent UA

£70,896

£1,847

£2,017

£170

9%

Blackpool UA

£74,737

£1,851

£2,017

£166

9%

Blackburn with Darwen UA

£74,838

£1,851

£2,017

£166

9%

Oldham

£77,509

£1,851

£2,017

£166

9%

Charnwood

£187,011

£1,787

£2,017

£230

13%

Forest of Dean

£188,476

£1,741

£2,017

£276

16%

South Staffordshire

£189,128

£1,725

£2,017

£292

17%

Solihull

£190,559

£1,708

£2,017

£309

18%

Harlow

£190,663

£1,749

£2,017

£268

15%

Hammersmith and Fulham

£617,876

£1,847

£2,017

£170

9%

Camden

£649,959

£1,769

£2,017

£248

14%

Elmbridge

£689,762

£1,695

£2,017

£322

19%

Westminster

£799,960

£1,716

£2,017

£301

18%

Kensington and Chelsea

£1,131,792

£1,708

£2,017

£309

18%

 

Leave a Reply

Your email address will not be published. Required fields are marked *