Legal & General is to start selling enhanced annuities directly to consumers, bypassing IFAs, via its Annuity Solutions brand.
The firm has stressed the need for consumers to seek independent annuity advice, despite this move to expand its direct offering.
Launched last year, Annuity Solutions initially offered customers a conventional annuity with the ability to achieve extra pension income by providing their postcode.
Now, customers with a medical condition or lifestyle health risk may also benefit from increased pension income. Depending on the severity of their condition, the uplift in income could be "significant," says the firm.
On average, L&G believes this could result in a 20 to 25% boost in pension income for customers who qualify for enhanced terms.
The enhanced annuity covers a wide range of lifestyle and medical health risks, including smoking and high blood pressure as well as serious medical conditions such as strokes, heart disease and cancers.
While the process of capturing this information is more involved, the Annuity Solutions team will provide guidance to customers so they disclose all relevant information to help individuals achieve a higher income, if possible.
Tim Gosden, head of annuity product development at L&G, says providing the ability for customers to arrange an enhanced annuity seemed the next logical step.
"As we will accept funds of a lower value than many other providers, we believe more customers will be able to benefit from the improved income an enhanced annuity can offer," he adds.
However, he supports the need for customers to seek independent financial advice, yet considers it is important to provide individuals with the choice to buy directly from a firm if they wish.
The normal minimum fund value accepted for an enhanced annuity is £5,000 but L&G will consider lower amounts over £1,000.
Taking the time to look
After 14-month FAS programme
More than half of people over the age of 55 see financial security as a top priority in retirement, yet a third allocate more time to buying a new car, research from Legal & General (L&G) has found.
Rebranded from OMW
Number of benefits