How your health and lifestyle choices could boost your pension income in 2026 – and bag you £1,000s more

2E3T3RT Retired man using laptop and taking notes in notebook studying pension plan and managing his budget Credit: Alamy ANNUITY providers use a host of factors to determine your quote, and the state of your health is one of the most important. Certain lifestyle choices, like how much alcohol you drink or smoking, can have an impact on what you’re offered. An enhanced annuity offers better rates, but they’re typically only available to those with reduced life expectancies. Credit: Getty Speak to Pense to explore how you can withdraw from your pension What is an annuity? An annuity provides a guaranteed income in retirement. Sign up for the Money newsletter Thank you! In the UK, this income typically lasts until you die and cannot be changed once set up – but you can buy annuities that last, these are known as fixed-term annuities. When shopping for your annuity, your quote will come as a rate. This is the percentage of the sum you exchange over the duration of a year. What is an enhanced annuity? An enhanced annuity, sometimes called an impaired life annuity, is designed for people whose health or lifestyle may reduce their life expectancy. Because insurers expect they may pay the income for a shorter period, they may offer a higher annual payment than they would to someone in excellent health. Not every provider offers enhanced annuities, and the amount of any increase depends on your individual circumstances. Speak to Pense to explore how you can withdraw from your pension How your health affects your annuity How much extra you can get from an enhanced annuity varies from person to person and depends on your health, lifestyle choices, and other personal information. But, to provide a rough estimate of what this can look like, Pense provided The Sun with a few figures. A 55-year-old, with no medical conditions, could get £6,355 a year on a £100,000 lump sum. However, if they drank 40 units of alcohol a week – than the NHS recommended limit – then they could receive £85 a year more in their payments. For older applicants with other health issues the difference is greater. A 75-year-old type 2 diabetic might get £327 more a year than the same person without the condition. Speak to Pense to explore how you can withdraw from your pension Health conditions that qualify you for an enhanced annuity Every insurer has its own assessment process, but a wide range of medical conditions may be taken into account. These can include: Diabetes High blood pressure Heart disease Previous heart attack or stroke Cancer Kidney disease Lung conditions such as COPD Parkinson’s disease Multiple sclerosis Arthritis in some circumstances Even if you don’t consider a condition to be serious, it could still affect the quote you receive. Lifestyle matters too Medical history isn’t the only factor insurers may consider. You could also be asked about: Whether you smoke or have smoked in the past Alcohol consumption Height and weight Prescription medication Recent hospital treatment Family medical history in some cases Answering these questions accurately helps insurers calculate the most appropriate income for your circumstances. FAQs What is an enhanced annuity? An enhanced annuity is a guaranteed retirement income product that may pay more to people with qualifying medical conditions or lifestyle factors. Do I need a serious illness to qualify? No. Many common conditions, including diabetes and high blood pressure, may be considered, although each insurer has its own criteria. Will smoking affect my annuity? It can. Smokers may receive a higher annuity income because insurers take lifestyle factors into account when assessing life expectancy. Can I compare annuity quotes? Yes. You are not required to accept your current pension provider’s offer and can shop around before making a decision Where to get personalised annuity quotes Different annuity providers will offer you different enhanced annuity rates, which is why comparing options can be important to find the best provider for your circumstances. Pense, our preferred retirement specialists. They are FCA regulated and can help find the right retirement for you. Pense has access to the whole of the open market and can compare quotes from a wide range of annuity providers, to help narrow down the providers that will offer the best value for money. Plus, if an annuity isn’t right for you, then Pense can advise on a more suitable alternative for you instead. For instance, this could be a drawdown plan, and it has a list of the best options on the market too.