Smoker Annuity


Last updated: 14/01/2017


Over the past decade some annuity providers in the UK have began to offer Smoker Annuities.


Unlike some types of Enhanced Annuities, which require a retiree to be suffering from a qualifying medical condition, a Smoker Annuity pays a retiree a higher annuity income simply because they have smoked at least ten manufactured cigarettes per day, or 85 grams (3 ounces) of rolling tobacco per week, and have done so for at least the last ten years, without any significant breaks within the last ten years.

Some annuity providers also offer an enhanced smoker annuity rate of income for retirees who smoke just 5 manufactured cigarettes a day.

As a general rule of thumb, the more cigarettes that you smoke the worse the impact on your life expectancy is likely to be and the more annuity income they may well offer you.

Note: Pipe or cigar smokers don’t usually qualify.

ARTICLE SECTIONS:

WHY DO SMOKER ANNUITIES PAY A HIGHER ANNUITY INCOME?
HOW MUCH MORE INCOME DOES A SMOKER ANNUITY PAY?
SMOKER ANNUITY RATES / INCOME EXAMPLES
ASKING FOR A SMOKER ANNUITY QUOTE

Smoker Annuities are intended to reflect the fact that life expectancies of long time smokers are usually lower than those who have not smoked.

Annuity providers can pay smokers a higher annuity income because, on average, they expect to pay the income for a shorter period of time when compared to a non-smoker.

 


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By asking for a Smoker Annuity rate, a retiree can receive an annuity income offer that is 5% to 10% higher when compared to one that takes no account of whether they are a smoker or not..

Those who qualify for Smoker Annuity rates will benefit from the higher annuity income whether they are ill or not. However, if they are ill, they may qualify for an even higher income.

The tables below show examples of Smoker Annuity rates compared to standard annuity rates.


EXAMPLE SMOKER ANNUITY RATES COMPARISON
ANNUITY PROVIDER ANNUAL ANNUITY INCOME
Just Retirement
£5,976.00
Legal & General
£5,928.00
SAGA
£5,904.00
Canada Life
£5,616.00
Scottish Widows
£5,424.00
Aviva
£5,280.00
Hodge Lifetime
£5,088.00
Retirement Advantage
£4,836.00

The above figures are for illustrative purposes only. They are based on smoker annuity rates for a male aged 65 (who smokes 20 cigarettes per day), with a pension pot of £100,000 buying a single life, conventional Lifetime Annuity with level income, no guaranteed period and the income paid in arrears without proportion. A Wokingham RG40 postcode was used for quotation purposes. The income figures shown are gross. Annuity rates checked: 14/01/2017 . Source: Money Advice Service Annuity Comparison Tables


EXAMPLE STANDARD ANNUITY RATES COMPARISON
ANNUITY PROVIDER ANNUAL ANNUITY INCOME
Just Retirement
£5,376.00
Hodge Lifetime
£5,088.00
Legal & General
£5,016.00
SAGA
£4,992.00
Canada Life
£4,920.00
Retirement Advantage
£4,752.00
Aviva
£4,320.00

The above figures are for illustrative purposes only. They are based on standard annuity rates for a person aged 65 with a pension pot of £100,000 buying a single life, conventional Lifetime Annuity with level income, no guaranteed period and the income paid in arrears without proportion. A Wokingham RG40 postcode was used for quotation purposes. The income figures shown are gross. Annuity rates checked: 14/01/2017. Source: Money Advice Service Annuity Comparison Tables


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As you can see, Smoker Annuities are a simple way of boosting your annuity income, so donít forget to ask your annuity adviser to get you a Smoker Annuity quote.

Smoker Annuity quotes are generally higher than standard annuity quotes because historically smokers have been shown to have a shorter life expectancy than non-smokers and the higher income is a way of compensating annuity applicants who smoke as they are likely to be paid an income for a shorter period of time.

Who knows? You could receive a higher annuity income simply because you are a smoker!


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