WORTHING, England, May 6, 2014 /PRNewswire/ --
New insight from MGM Advantage, the retirement income specialist, reveals that thousands of pounds worth of income from enhanced annuities goes begging each year.
The company has calculated the income available from an enhanced annuity for people who have one of three common medical conditions. By comparing this to a standard annuity, a 65-year old could receive additional income of up to £5,280, over a typical 20-year retirement.
Despite the freedom and choice outlined in the Budget an annuity remains an attractive option. In short, annuities guarantee that people do not outlive their pension savings thereby providing certainty and security in retirement. An enhanced annuity goes one step further by maximising income based on the lifestyle and health of an individual.
The table below shows the additional income that can be generated by using an enhanced annuity for three common health conditions, high blood pressure, diabetes and cardiovascular disease.
Additional Total lost % of 55-64 % of 55-64 Income income % income year old year old generated on compared to increase over a Medical males with females with Enhanced existing in 20-year condition condition condition Annuity provider income retirement Fund size assumed = GBP26,800 / current provider income = GBP1,467 / 65-year old High blood pressure 44% 34% GBP1,650 GBP183 12.48% GBP3,660 Diabetes 12% 6% GBP1,688 GBP221 15.07% GBP4,420 Cardiovascular disease 18% 18% GBP1,731 GBP264 18.00% GBP5,280
Andrew Tully, MGM Advantage commented: 'The recent budget certainly put the cat amongst the pigeons for the annuity industry. Freedom of choice is a great thing but with choice comes risk. Nobody goes into retirement wanting to run out of money or suffer a dramatic fall in their income. Annuities, and in particular enhanced annuities, remain the only investment that offers a high rate of return for life and provide insurance against longevity risk, so you never run out of money.
'These figures highlight how common medical conditions can make a huge difference to income in retirement. Our statistics show that around 70% of people are likely to qualify for an enhanced annuity but many are unaware of the option.
'Retirees can get more bang for their buck by shopping around and disclosing everything they can about their health and lifestyle. It's natural for people to be bashful about medication, their weight or how much they drink or smoke but in the case of an enhanced annuity honesty is the best policy; their health could be their wealth.'
For those people who don't feel comfortable discussing their lifestyle or medical history directly with their financial adviser MGM Advantage have a telephone interview service in place. Our team of specialists are trained to deal sensitively with customers and ensure we capture all the relevant information in one go to make the most of peoples hard earned savings.
MGM Advantage has published a consumer guide on enhanced annuities. The guide aims to help consumers understand more about how their health and lifestyle can be instrumental in boosting their retirement income. http://www.mgmadvantage.co.uk/annuities/enhanced-annuity/healthforwealth/
Notes to editors
- Source: Health and social care information centre (2011) - prevalence of any doctor-diagnosed Diabetes, Cardiovascular and hypertension - for ages 55-64 - male and female.
- Source: Money Advice Service, male aged 65, monthly in advance, guaranteed for 10 years, £26,800 fund size (average enhanced annuity value - FCA annuity review). Figure shown is average of the 3 bottom income figures.
- Source: MGM Advantage Enhanced Annuity.
About MGM Advantage
MGM Advantage is a retirement income specialist, innovating, growing rapidly and working hard to make the most of people's money in retirement. From offices in London and Sussex, the provider sells its products through financial advisers.
The company attracted the backing of private equity investors TDR Capital, with the deal concluding in late 2013. This resulted in the creation of a new life company using the MGM Advantage brand, and resulted in a split from the mutual society (Marine and General Mutual). The strategy set out in 2008, to focus on the retirement income market, is retained.
MGM Advantage's market leading products include an investment-linked annuity, the Flexible Income Annuity, the first retirement income product to be rated five stars by Moneyfacts. This gives customers the flexibility to change income levels at different stages of retirement and the potential for growth and therefore, the potential to negate the impact of inflation. It also provides a minimum income guarantee and death benefits. Enhanced rates are also available for the Flexible Income Annuity.
MGM Advantage also specialises in providing enhanced annuities designed to provide additional income in retirement for people with health conditions, a poor medical history, or lifestyle conditions, for example smoking.
Through new product innovation and development MGM Advantage is always looking to find ways in which its customers can improve their retirement income, and encourages people approaching retirement to shop around for the best annuity.
MGM Advantage is part of a group of companies owned by ICE Acquisitions SARL (ICE Group). This group of companies includes the new life company (MGM Advantage) and a service company (MGM Advantage Services Limited). MGM Advantage manages assets in excess of £1.4bn (as at December 2013).
For further information
SOURCE MGM Advantage