People in affluent areas could lose nearly a fifth of their retirement income if they do not declare medical conditions or seek quotes from a variety of pensions providers, insurer Partnership has found.
The firm, which specialises in insurance products for people with long-term health conditions, said this was because standard or conventional annuities are often priced by postcode. As people living in more affluent areas are expected to be healthier and live longer, they therefore receive lower annuity rates.
However, this process though takes no account of medical conditions. Partnership said that, as an example, some of the estimated 3.7 million people with diabetes who live in more affluent areas could receive up to 19% less from their pension pot than they would were insurers aware of the condition. Diabetes is the most frequently un-reported complaint.
It gave the example of a 65-year old with a pension fund of £30,000 purchasing a standard annuity in Elmbridge, Surrey.
This would be worth £1,695 at annual standard annuity income, but a diabetic could expect £2,017, an increase of £322, or 19%.
Even in low income areas such as Hull or Blackpool, the firm said increases of around 9% could be available.
Partnership's managing director of retirement Andrew Megson said: 'You want to make sure that you get the best possible income from your pension pot.
'One simple way to do this is to ensure that you declare all your medical conditions and speak to a variety of providers to get the best possible retirement income.'
