Insurers could be sending out the wrong message on health matters by paying out larger pensions to those that drink heavily, according to a report in the Daily Mail today.

People with ill-health have always received better annuity rates due to their lower life-expectancy and now a new traffic light system, part of a new blood test developed at the University of Southampton, can reveal liver damage that would previously have gone unnoticed.


Reaching retirement requires you to buy an annuity from an insurance company in order to receive your pension as a regular income. At this time you must fully disclose your state of health.

Insurers then pay a higher income to people in poor health as their reduced life expectancy means the pension pot will stretch out over fewer years than for those in rude health.


This means that anyone who has smoked regularly; is overweight; has suffered heart problems; or is diabetic, currently qualifies for bigger pensions. However, heavy drinkers that have not had medical treatments have not benefitted from this system because liver disease can go

Liver problems
A report from the University of Southampton states: "Liver disease develops silently without symptoms, and many people have no idea they have liver failure until it is too late – one-third of people admitted to hospital with end-stage liver disease die within the first few months."

Now a new 'traffic light' test devised by Dr Nick Sheron and colleagues at University of Southampton and Southampton General Hospital could be used to diagnose liver fibrosis and cirrhosis.

Results of the blood test reveal severity of liver damage; whether irreversible scarring is present and the likelihood of death over the next five years. This kind of information would cut life expectancy dramatically and lead to a bigger pension payout undetected.


Wrong message
While heavy drinkers are likely to welcome the new development, there are fears in the industry that the increase in people inline to receive larger pensions will send the wrong message to society by effectively rewarding those that abuse their bodies.

One in five Britons now drinks more than the recommended daily allowance - equal to a pint and a half of beer for men and a glass of wine for women. And the over-45s are three times as likely as younger adults to drink almost every day, according to the Office for National Statistics.

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Lifestyle choice
The impact of health and lifestyle choices on annuity rates has been well documented. Figures from Just Retirement, based on the difference between the lowest-paying standard annuity and the best enhanced annuity for a 65-year-old man with a £45,000 pension pot, are startling.

The data shows that smoking 10 cigarettes a day for the last 10 years would boost his annuity by 37%; drinking 50+ units of alcohol a week would boost it by a further 19% and having a body mass index (BMI) of 36% or higher leads to a further 26% hike.

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