Marvin OnumonuTwo in five (40%) UK adults aged over 50 did not know that health conditions could increase their retirement income, research from Standard Life found.
The study showed 40% were unsure how sharing health information affects annuity rates.
More than four in 10 (41%) were not sure if high blood pressure would impact their annuity income, while 40% were unsure about type 2 diabetes and 37% about regular smoking.
Only 17% thought smoking could mean more income, with even fewer linking high blood pressure (13%) or type 2 diabetes (12%) to higher rates.
Standard Life’s analysis found customers could get on average 9% more income through underwriting.
Based on a £100,000 pension pot, a healthy 66-year-old could expect about £7,510 a year.
Someone with a smoking history could see a 10% rise to £8,280 a year, while someone with type 2 diabetes could see a 9% uplift to £8,160.
Those with high blood pressure could expect a 3% uplift to £7,740.
Pete Cowell, head of annuities at Standard Life, said: “Many people assume health conditions will always work against them financially, but that’s not the case with annuities.
“Being open about your health when shopping around can increase the income you receive for the rest of your life.
“The biggest risk is not being transparent or not realising that your health information could work in your favour.”
The research also found a gap between people’s honesty and the income they get.
Over half (57%) said they are very honest about their health and finances with professionals, with only 3% admitting they are not.
Cowell added: “There may be some reluctance in discussing health in a financial context, especially if there is confusion on how certain conditions impact income received.
“In this case, some providers such as Standard Life, make it possible to complete the health declaration online, rather than discussing sensitive health data over the phone or with an adviser.
“Ultimately however, enhanced annuities exist to reflect individual circumstances, and transparency ensures you get the best arrangement for your situation.”
