People living in expensive areas could lose nearly a fifth of their retirement income for life by not declaring their medical conditions, the insurer Partnership has found.
This article first appeared on Your Money.
Standard or conventional annuities which determine retirement income are often priced by postcode - so people living in more affluent areas are expected to be healthier and live longer and therefore get lower annuity rates.
However, this does not take into account the fact that people in poor health are often entitled to a higher income when they retire. Providers say they can pay more as people with medical conditions are less likely to live for longer.
According to Partnership, some of the UK's estimated 3.7 million diabetics living in more affluent areas could find that they receive up to 19% less from their pension pot by not declaring their condition.
With diabetes the most under reported medical condition according to Partnership's actuaries, even those living in less affluent areas would find that they could gain an increase of 9% by speaking to their provider.
Andrew Megson, managing director of retirement at Partnership said: "Whether you live in an expensive area or a more modest one, you want to make sure that you get the best possible income from your pension pot. One simple way to do this is to ensure that you declare all your medical conditions and speak to a variety of providers to get the best possible retirement income.
"Over 3.7 million people are living with diabetes in the UK and just by telling your annuity provider about this condition, people can get up to 19% more annual retirement income. It is vital that when people start to prepare for retirement, they not speak to a variety of annuity providers but also take into account any medical or lifestyle conditions that they may have."
EXAMPLE - Figures for a 65-year old with a pension fund of £30,000 purchasing a standard annuity
|Borough/district or unitary authority||Average House Price||Annual Standard||Annual Annuity income impaired -Diabetic||Uplift||% increase|
|Kingston upon Hull, City of||£68,386||£1,847||£2,017||£170||9%|
|Blackburn with Darwen UA||£74,838||£1,851||£2,017||£166||9%|
|Forest of Dean||£188,476||£1,741||£2,017||£276||16%|
|Hammersmith and Fulham||£617,876||£1,847||£2,017||£170||9%|
|Kensington and Chelsea||£1,131,792||£1,708||£2,017||£309||18%|
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