Nearly one in five new pension annuities are now arranged on an enhanced basis that reflects the ill-health of the purchaser, according to leading actuaries Watson Wyatt in March 2005.

This means that the purchaser is receiving a better than normal rate. But normal rates are also coming down as a result because the remaining pool of standard rate annuity buyers is that much healthier.

If you are about to turn your pension fund into an annuity, check with us about what is on offer — for some companies you just need to be a smoker to qualify for their enhanced rates.

Remember, once you have bought an annuity, it is almost impossible to change it. You should seek independent advice before making any decision.