What’s the deal with enhanced annuities?

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Adviser Insight and Opinion team

November 03, 2023

5 mins read


We know advisers have close relationships with their clients. But could the trust you share with your clients help to boost their incomes in retirement? It all starts with an honest conversation. 


Better rates. Bigger incomes.

If your client has a qualifying health or lifestyle issue, they could be eligible for an enhanced annuity rate. 

These work on the basis that, because of their condition, they may have a shorter life expectancy. And so some annuity providers, like Standard Life, will be prepared to pay them more each year. 

The good news is that even some fairly common conditions can qualify for an enhanced rate. So while it can be a sensitive subject, it’s always worth having an open conversation about your client’s health and lifestyle - because it could land them a better deal. 

So what difference can it make?

To bring the potential benefits of an enhanced annuity to life, let’s look at five case studies. We’ll show you the income each hypothetical client might expect from a standard annuity - as well as what an enhanced annuity would deliver.

Our case studies are purely for illustrative purposes. Clients who share the same circumstances as those we’ve outlined below may be quoted different amounts based on a number of variable factors, including how their condition is managed. Annuity rates also change all the time, so they could be higher or lower in the future.

The figures we’ve shown for each sample client were created on 21 September 2023 for a Standard Life Pension Annuity. All amounts have been rounded to the nearest pound. 

Client 1 - Brian

Brian lives in Chichester with his partner, Carol. He’s worked in a local accounting firm for a number of years and plans to retire at 64. He has a total pension pot of £170,000.

At a regular check up in 2013, Brian was diagnosed with high blood pressure and high cholesterol. He wants to use his total pension pot to secure a guaranteed income for life.

Client 2 - Helen

Helen runs a small art gallery in Carnoustie, where she’s lived all her life. She owns her own home and currently lives with her two adult children, Michael and Sophie.

Helen was diagnosed with coronary heart disease in November 2021 and has decided to retire now, at 62. She has a total pension pot of £126,000.

Client 3 - Gloria

Gloria is 67. She’s semi-retired and lives in London with her husband, Bruce. They plan to downsize and move to the south coast, close to where Gloria spent her childhood.

Gloria has been treated for type 2 diabetes since she was 45. She has a total pension pot of £250,000 and would like to use half to buy a guaranteed income for life and leave the rest invested.

Client 4 - Matthew

Matthew works as a senior manager at an oil refinery in Grangemouth, Scotland. He’s currently 55 and has a passion for football – which he shares with his husband, Innes.

Matthew suffered a stroke while at work back in 2017. He plans to semi-retire and would like to use £100,000 from his total pension savings of £450,000 to buy a pension annuity. He wants to leave the rest invested so it can potentially benefit from future growth.

Client 5 - Antonio

Antonio is 66 and has worked as a chef for almost thirty years. He currently lives in Northampton with his wife, Kathy, and their three children.

Antonio was diagnosed with colon cancer in 2020 and, after successful treatment, is currently in remission. He wants to retire now and has a total pension pot of £97,000.

Start your conversations with the right tools

Whenever you ask for a pension annuity quote, your client’s health and lifestyle conditions are usually taken into account. This helps the provider determine, from the outset, whether your client qualifies for a standard or enhanced rate.

This being the case, it’s really important that you’re able to fully disclose as much health and lifestyle information as you can up front. 

To make it easier for you to capture everything, we suggest you use the industry standard Retirement Health Form. You can download a copy at: retirementhealthform.co.uk/adviser.

Does my client need a medical?

As always, you should check the conditions of any quote so you’re clear on what extra information you’ll need to provide if you client was to progress to an application.

For a Standard Life Pension Annuity, we usually wouldn’t ask them to attend a medical examination – but they may need to complete a health questionnaire.

At times, we may also ask your client’s permission to approach their doctor for a medical report – or ask them to carry out a medical test to confirm the information they’ve given us is correct.

If the information your client provides is incomplete or inaccurate, or if a medical test or permission to approach their doctor is refused, we may reduce the annuity payments being paid and/or seek recovery of any payments we’ve already made. 

Take a closer look at the Standard Life Pension Annuity

Our pension annuity can be written on standard or enhanced terms. So if your client is suffering from lifestyle and/or medical conditions, they could get more for their money.

We also offer a range of optional features, such as death benefits and inflation proofing, helping you to tailor your client’s annuity to match their exact needs.

Visit our product page to find out more.



The information on this site is for qualified financial advisers and must not be relied on by anyone else. If you are not an adviser please go to our customer website for more information about our products and services.

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