Enhanced annuity – What they are and how to get one
Depending on your circumstances, an enhanced annuity could be a way to boost your retirement income. Find out if you're eligible for more than you think at retirement and how to check.
Key points:
- An annuity offers you the security of a guaranteed income for life.
- If a provider thinks you’ll have a shorter time in retirement they may decide to offer you an enhanced annuity, which pays a higher income than the standard rate.
- You're more likely to be eligible for an enhanced annuity if you have a higher BMI, a heavy smoker or have a health condition like diabetes or high blood pressure.
- In 2025, 25% of annuity customers didn’t tell us about a condition that could have led to a higher annuity payment.
In a time of uncertainty, financial security is key. People are looking for reliable ways to secure their future income. Depending on your circumstances, an enhanced annuity could offer a boost to your retirement income.
Here, we’re going to talk about how you may be eligible for more than you think at retirement, and exactly how to check.
You’ve saved into a pension, and you know what you’ve got in your pot (or pots). Now what?
An annuity is sometimes seen as a 'traditional pension', in that it pays you an income for the rest of your life. You can buy one with the money from your pension pot. The level of income you receive will depend on the amount of money you buy it with and the rates offered by the provider, with factors such as your health, lifestyle and where you live often impacting the annuity rate. It's important that you do your research and 'shop around' to make sure you get the best deal available to you.
What’s an enhanced annuity?
An annuity pays an income for life. Because an annuity pays an income for the rest of your life, providers will estimate how long you are likely to live when working out how much income they can offer you. They'll ask for details of any health conditions and lifestyle choices that might affect your life expectancy. If a provider thinks any of these factors could shorten your life, they may decide to offer you an enhanced annuity, which pays a higher income than the standard rate.
Why an annuity?
There are pros and cons to everything, and ultimately the end choice is always yours. So even if you’ve sat and done all your research and you’re still not sure, there are people you can ask. You may already have a financial adviser to speak to, but if not, you can find one at Unbiased. You can also speak to our advisers, just be aware that any recommendations our advisers make will be for products from Aviva and carefully selected partners. For more support you could also check out our article about financial advice. Or to get free, impartial guidance speak to Pension Wise.
Here are some things to consider:
Reassurance
The most attractive thing about annuities is that they guarantee you an income for life. In most cases, you can choose to have an income that pays out at a fixed level for the rest of your life, or one that starts lower, but increases over time, either at a fixed rate or increasing in line with the ‘Retail Price Index’ which is a measure of inflation.
Looking out for your family
You could choose an annuity that pays out during your lifetime; however, you may want to consider providing for loved ones after you’ve gone. There are two ways you could do this.
One would be to choose an annuity that continues to pay an income to your partner or dependent after you die.
Another is an annuity that offers value protection. Our value protection option guarantees that, if you die, we’ll pay a lump sum equivalent to the annuity purchase price, less any payments already made.
On the flip side, there are always things that might make them not work for you:
Long-term commitment
It's essential to remember that buying an annuity is a lifelong commitment. Unlike other retirement options that may offer flexibility, once you have set up an annuity you can't change it or cash it in. So, taking the time to consider your retirement needs and wants is crucial.
Value for money
If you choose an annuity that pays out for your lifetime only and has no value protection or guaranteed period or payment to a spouse/dependant on it, you may get back less than you paid for it. This depends on how long you live.
How do I know if I’m eligible for an enhanced annuity?
There are several factors providers may look at when working out whether you can get an enhanced annuity. It’s worth checking, as it could mean having extra money for retirement rather than facing financial concerns.
You are more likely to be entitled to an enhanced annuity if you:
- Are or have been a heavy smoker
- Have higher BMI
- Have health conditions such as:
- Stroke
- Cancer
- Diabetes
- Heart attack
- Kidney failure
- Chronic asthma
- Multiple sclerosis
- High blood pressure
- High cholesterol
And if you’re considering an annuity as an option, make sure you tell your provider about any of these factors. It's quite common for people to under-disclose their health details when applying for an annuity. At Aviva, we found that around 25% of our customers in 2025 didn't tell us something that could have led to us offering them a higher income.
How do I apply?
When you call to ask for a quote from a provider, make sure you tell them if you have factors that you think may entitle you to an enhanced annuity. The best way to boost your income is to come prepared with as much information as possible, including medical letters or hospital reports if you have them available.
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