blood pressure checkAndrew Parsons/PA Wire/Press Association Images

60% of those over the age of 55 could be entitled to a huge boost in their pension income. However, almost three quarters are completely in the dark about the key to a better pension.

So could you qualify, and how do you go about it?

The secret

The good news is that you don't have to save any more money, or do anything particularly clever, you just have to have one of a number of illnesses or lifestyle factors.

The key is the enhanced annuity. When you retire, if you have a defined contribution pension or a personal pension, you will get a pot of money and it's up to you to shop around for an annuity to turn it into an income.

Enhanced annuities are far more generous than a normal annuity, and for an average retiree can mean thousands of pounds more in income every year.

Qualifying

Enhanced annuities are for those who are considered to have a shorter than average life expectancy, which includes the obese, smokers and those with certain illnesses. And a surprising number of people have illnesses that would qualify them for a better annuity.

According to MGM Advantage, 40% of the over 55s have suffered or currently have high blood pressure, 33% of the over 55s have or have had high cholesterol, and 12% have diabetes. All of these conditions could qualify for a better retirement income through an enhanced annuity.

Some 60% of people aged 55 and over have received medical treatment for conditions which would qualify them for an enhanced annuity, and yet 72% said they were unaware that certain lifestyle or medical conditions could qualify them for a better retirement income. Andrew Tully, Pensions Technical Director, MGM Advantage said: "With such a high proportion of our retirement nation experiencing medical problems, it is of deep concern that many people remain unaware of enhanced annuities. Despite as many as 70% of retirees potentially qualifying, recent industry data showed that only 2% bought an enhanced annuity in the non-advised market in 2011, which is shocking.

The difference

"When you look at the difference in rates, a man, aged 65 with average impairment could receive an extra £8,684 income for the first five years of retirement simply by making the right choice."

The difference between standard and enhanced rates can be significant. For example, a healthy man, aged 65, with a £100,000 pension fund could receive £6,106 a year income. If this man was a smoker with high blood pressure, the annual income would increase to £7,115. If the same man had diabetes with high blood pressure and high cholesterol, the annual income would increase to £7,843.

It is therefore worth everyone checking their options when they retire and coming clean about their health.

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