Own­ing up to men­tal health prob­lems can boost your pen­sion

The Daily Telegraph - Your Money - - MONEY - Mar­i­anna Hunt

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.”

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