Alcohol, cigarettes and annuities – what they could mean for your retirement

Converting your pension into an annuity can give you a guaranteed income for life from age 55 (57 from 2028). The amount you get is impacted by your health and lifestyle.

Alcohol and cigarettes are two of the key lifestyle factors which could make a big difference. We’ve taken a closer look at how they could impact how much annuity income you could get.

This article isn’t personal advice. If you’re not sure what’s right for your situation please seek financial advice. Once set up, an annuity cannot usually be changed so it’s important to consider your options carefully before you apply.

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How alcohol and smoking can change your annuity income

If you’re fond of a bottle or two of wine a week, or you smoke, you could qualify for a higher annuity income.

These quotes were run on 11 June 2021 using our annuity quote tool. They’re based on a 65-year-old with a £100,000 pension, choosing a single life annuity, with no escalation, no guaranteed period and paid monthly in advance.

The amount of income from an annuity you’ll get depends on the value of your pension, your circumstances, age, the options you choose and the rates available at the time. That’s why it’s worth running an annuity quote yourself to see what you could get.

Annuity quotes are only guaranteed for a limited time. The rates change frequently so might go up or down in future.

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Could a guaranteed income ease your worries?

Get a free annuity quote to find out how much income you could get and we’ll enter you into our prize draw with a chance to win 1 of 5 Fortnum & Mason hampers. Offer ends 15 July. Terms apply.

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Common health conditions also impact annuity quotes

Even if you’re one of the 17% who say they’re teetotal, or the 86% of UK adults that don’t smoke, it’s still worth confirming your health and lifestyle habits when getting a quote. It could mean you qualify for a better rate and get more money in your pocket.

You don’t have to be seriously ill to qualify. In fact, last year nearly 9 out of 10 HL annuity clients qualified for higher income by simply confirming their health and lifestyle details.

Common conditions like diabetes could also make a difference, as could your height and weight, or even whether you used to smoke. For example, a 65-year-old living with diabetes, who doesn’t drink or smoke, could get an extra £876 a year, if they bought a single life annuity with a £100,000 pension (on 11 June 2021).

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Get help with your retirement planning

What you do with your pension is an important decision. We strongly recommend you understand your options and check that the option you choose is right for your circumstances before you go ahead. Ask for financial advice if you’re unsure.

You can get guidance on your pension and retirement options by booking an appointment with Pension Wise. It’s a free and impartial service set up by the government for anyone over 50.

You could also consider taking financial advice at retirement. Although it’s not free, an adviser can help you navigate those vital decisions, so you can be confident you’re getting what’s best for you.

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