Enhanced pension

Richard_Victor_Meldrew

This may be of interest to hopefully a minority of people wishing to take an enhanced pension due to ill health.
When buying an annuity the pension generated can be increased if the pension company accept that your life is impaired, ie. you might not live as long as someone of a similar background.
This is well known but it may be worth considering the following.
Normally a married person would take out a pension that provides for their partner on the former's death. If the former has a life impairing illness their pension can be enhanced. However, the greater the pension provision for the partner the less is the enhancement. It's obvious really; the healthy partner may live a long time after the death of their spouse and the pension company has to fund this somehow.
If the impaired life person takes the pension solely in their own name the pension company does not need to consider the spouse and therefore the enhancement can be a great deal higher.
Try this; take a pension against the impaired life only, guaranteed for 5 years, (if there is a life impairment you would be lucky to get longer than 5 years but try). Save the extra pension for 5 years, (does not even matter if you pop your clogs because of the guarantee), then use the proceeds to provide for your partner.
In my case I was offered about a 10% enhancement when quoted for a pension including my wife but when quoted for my own life duration only the pension was nearly doubled. I had to push for this because I found that Norwich Union did not always understand their own rules and like all the others I suspect wanted me to take the first offer.
Still going strong and intend to do so for many years yet and am enjoying the higher pension.