The cost of smoking in retirement – what if you can’t kick the habit?

We all know the dangers of smoking and the damages it can do to our health, yet in the UK 16.6% of us smoke.

Based on 11 cigarettes a day, smoking costs a staggering £1,855 a year and the average pensioner’s income after housing costs is £15,808 a year – it could see a huge portion of your spending money go up in smoke.

But all is not lost when it comes to finances.

If you can’t kick the habit before retirement it could mean you end up with a higher retirement income. If you’re considering buying an annuity (a secure guaranteed income for life), how much income you’ll receive is influenced by your health and lifestyle choices, like smoking.

Unlike most insurance products, providing details of your unhealthy lifestyle habits and any health conditions could mean you actually get more for your money.

How much annuity income can smokers get?

For example, according to quotes run on 10 March 2020, a person who smokes 20 cigarettes a day, could end up with £475 more annuity income every year if they provided these details when they applied for an annuity. Across 15 years that amounts to £7,125. Remember though that rates continually change and the rates that you might be offered will depend on your personal circumstances and the options you choose.

Annual annuity income from a £100,000 pension

Scroll across to see the full chart.

These quotes were generated using our online annuity service on 10 March 2020. All quotes are for a single 65 year old with a £100,000 pension living in an area with an average life expectancy. They’re based on a single life annuity, with no escalation, no guarantee period and paid monthly in advance. In some of the quotes we’ve also added high blood (HB) pressure and high cholesterol (HC) details.

So if you smoke, why not find out how much more secure income you could get by requesting an annuity quote today?

Just remember to confirm how much you smoke, and when you started, when you request your quote.

Our annuity service can help you compare quotes from annuity providers across the open market all in one go. Just make sure you won’t lose any valuable guarantees or benefits from your current pension provider before switching.

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The amount of annuity income you’ll receive depends on the value of your pension, your circumstances, the options you choose and the rates available at the time. You can buy an annuity any time from 55 (57 from 2028).

Ex-smokers could qualify too

Today, ex-smokers outnumber smokers. With 61.3% of those who have smoked having managed to kick the habit.

If you’ve smoked in the past, you might be able to get a higher annuity income too. All you need to do is provide details of your smoking history when you apply for a quote.

For example, a 65 year old, using the same details as above who smoked 20 cigarettes a day from age 18, and gave up two years ago, would get £5,202 a year if they bought a single life annuity with a £100,000 pension (on 10 March 2020). That’s £128 more each year than if they didn’t share these details.

The more details you disclose the more income you could receive

It’s not only smoking which could mean you end up with a higher annuity rate. Common health conditions like high blood pressure, high cholesterol and diabetes could mean you qualify for a higher income. Even confirming your height, weight and relationship status could mean you get more.

Annuity rates can change regularly and may go up or down in the future. Quotes are guaranteed for a limited time only and once bought they can’t normally be changed.

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What help is available?

If you’d like to get annuity quotes over the phone, you can call our annuity experts on 0117 980 9940. They’re available six days a week: Monday-Thursday 8am-7pm, Friday 8am-6pm and Saturday 9:30am-12:30pm.

What you do with your pension is an important decision. We recommend you understand your options and check your chosen option is right for your circumstances. Take advice or guidance if you’re not sure. The government provides a free and impartial service to help you understand your retirement options - more on Pension Wise.

This article isn’t personal advice. If unsure, please ask for advice. We offer a range of information and support to help you plan your own finances. We also have an advisory service that can help you achieve your goals. Our flexible approach means you only pay for the advice you need.