It seems poor health really can equal great wealth with new figures from Rockingham Retirement showing that an enhanced annuity, available to unwell pensioners, can boost a client's retirement income by 80 per cent.

The retirement income specialist has found that pensioners with serious cardiac problems are seeing their income almost doubled because their poor health entitles them to an enhanced annuity.

"Pensioners who smoke or who suffer from ill health can look forward to a much more affluent lifestyle if they seek an impaired annuity deal when they cash in their pension pot instead of accepting the default option," explained Steve Hunt, managing director at Rockingham Retirement.

"People approaching retirement must ask themselves what kind of life they want to live as a pensioner. Do they really want to be counting the pennies or setting off on a cruise? It may sound facetious, but the fact is that they really could be enjoying a much more comfortable lifestyle if they shopped around for the annuity to which they are entitled."

Research by the group shows that an impaired annuity can add £3,500 a year to the income of a 65-year-old male with a £100,000 pension fund.

"Let's not beat about the bush on why this is the case. The increased rates are available because the recipients have a shorter life expectancy.

"Put simply, if there's a chance you haven't got that many years to enjoy your retirement, you should be able to live life to the full while you can. For the majority of people that means having a decent income."

Therefore, Rockingham Retirement said that as a rule, pensioners should receive more money the more serious their condition.

- Pensions Age August 2009

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