Owning up to mental health problems can boost your pension
Declaring mental health disorders may add thousands of pounds to your pension, Telegraph Money research has found.
It has long been possible to get an enhanced rate when purchasing an annuity if you have a condition expected to shorten your life.
Enhanced or “impaired life” annuities are sold to individuals whose health or lifestyle is expected to reduce their life expectancy.
For serious health problems, rates can be as much as 60pc higher than on conventional annuities. Typically, enhanced policies have been sold to people with conditions such as heart disease, diabetes and cancer. But insurers will also offer improved rates to those who suffer from conditions such as bipolar disorder and schizophrenia.
According to specialist insurer Canada Life, someone diagnosed with serious depression, controlled with prescribed drugs, could get as much as £4,000 more per £100,000 over a typical retirement of 30 years.
A 65-year-old who doesn’t qualify for an enhanced rate would get £4,682 a year, according to Canada Life. Someone with diagnosed mental health problems would get £4,814.
Paul Keeble of Canada Life said the customer would need to allow the annuity company to see their GP records to qualify.
Research published last month by Legal & General found that more than three quarters of over-55s were unaware that medical conditions could increase pension incomes.
Annuity purchase is irreversible. Unless an inflationlinked annuity is bought, the rate will not increase over time. This makes it vitally important to secure the highest rate possible at the outset.
L&G said it reviewed customers on a case-by-case basis. A spokesman said: “Brief, reactive episodes in the past don’t usually qualify for an enhanced annuity as they are typically short-lived with appropriate treatment and management. However, longterm mental health disorders are complex and require individual underwriting for us to work out what income to offer a retiree.
“Such conditions include mania, manic depression and bipolar disorder, persisting clinical depression, schizophrenia, psychosis and eating disorders.”
Pension incomes can be dramatically boosted for smokers