Budget pension changes not good for me

Grandmama

Do not lie about being a smoker. With a couple of medical conditions I have and a smoker I was able to negoitiate a higher annuity. To get this I had to have a medical with the annuity provider. One of the tests is a simple urine test which shows how much nicotine you have in your body. This cannot be built up with just a ciggy puff or two! I had to show my prescriptions etc and they also contacted my Doc. Since I was going for a higher annuity I did not find this an intrusion as it was to my advantage.

coyrls

Grandmama wrote: »

Do not lie about being a smoker. With a couple of medical conditions I have and a smoker I was able to negoitiate a higher annuity. To get this I had to have a medical with the annuity provider. One of the tests is a simple urine test which shows how much nicotine you have in your body. This cannot be built up with just a ciggy puff or two! I had to show my prescriptions etc and they also contacted my Doc. Since I was going for a higher annuity I did not find this an intrusion as it was to my advantage.

Don't worry, I wasn't going to!

charliehell

chucknorris wrote: »

Will his medical records back that smoking claim up though?

Eh..I don't know about you but I haven't been to a doctor for 25 years..plus who says one has to be a life long smoker?

bmm78

coyrls wrote: »

You might be right about annuities. My logic for thinking that they would be likely to offer worse value in the future is that as the volume of money going into annuties is reduced, the economies of scale would also be reduced and hence the product would become more expensive.

Pretty much what is likely to happen in the short to medium term, and what already appears to be happening. There have been several rate reductions this week (although it's unclear whether this is just a temporary measure for breathing space).

The companies offering the highest rates are generally the specialist enhanced annuity providers, who have taken a massive hit this week. They are more likely to contract and/or move sideways, rather than up their rates.

The premise that "annuity providers will have to up their rates to win business" only works on the assumption that they were making excessive profits on annuity sales. This may have been true at the bottom end, but much less so at the top end of the market where everyone who was shopping around would be anyway.

Poor value standard rates are likely to improve, but good value enhanced rates are likely to suffer. There are obviously other variables to consider, but it's misguided if anyone thinks annuity rates are going to shoot through the roof.

bmm78

charliehell wrote: »

Eh..I don't know about you but I haven't been to a doctor for 25 years..plus who says one has to be a life long smoker?

It varies from provider to provider, but most require a minimum amount smoked over a lengthy period to qualify for an enhancement.

They frequently check this with cotinine tests, and I've seen some horror stories where people have either embellished their smoking habits or quit after applying. They reserve the right to amend the income if the declared information doesn't stack up, and if they do reduce the rate it's generally too late to do anything about it.

charliehell

Grandmama wrote: »

Do not lie about being a smoker. With a couple of medical conditions I have and a smoker I was able to negoitiate a higher annuity. To get this I had to have a medical with the annuity provider. One of the tests is a simple urine test which shows how much nicotine you have in your body. This cannot be built up with just a ciggy puff or two! I had to show my prescriptions etc and they also contacted my Doc. Since I was going for a higher annuity I did not find this an intrusion as it was to my advantage.

I doubt a nicotine test would be called for if no other medical claims were made. Besides that ANY nicotine in the body can be detected by urine tests a few hours after imbibing, in fact there would be no need to smoke at all, chewing a lump of tobacco would work..

charliehell

bmm78 wrote: »

It varies from provider to provider, but most require a minimum amount smoked over a lengthy period to qualify for an enhancement.

They frequently check this with cotinine tests, and I've seen some horror stories where people have either embellished their smoking habits or quit after applying. They reserve the right to amend the income if the declared information doesn't stack up, and if they do reduce the rate it's generally too late to do anything about it.

So you are saying that once one has qualified for an enhanced annuity one has to go back intermittently for urine tests?

I seriously doubt that..

:rotfl:

bmm78

charliehell wrote: »

So you are saying that once one has qualified for an enhanced annuity one has to go back intermittently for urine tests?

I seriously doubt that..

:rotfl:

No, they send someone round to do a cotinine test, which may be urine or a swab test. It is a single check.

Cotinine tests check for concentration and not just the existence, and there is a massive difference between the levels typically found for even a 5 a day smoker compared to a 20 a day smoker.

charliehell

I'm sure if I was determined I could fool them..but this is immaterial now since the need for an annuity has been removed..

:beer:

paul5046

According to the IFS this is what might happen. At the moment most people have to buy an annuity so the annuity market has some people who will live a long time, and some who will live a short time. Some will lose insurance companies money (those who live long lives) and some will make them money. With the new rules, people who think they may die soon, or are in poor health, will be tempted to take all the money as cash. That leaves those who expect to live a long time, as a larger percentage of annuity holders. Therefore the effect will be to push down annuity rates as insurance companies try to redress the balance.