Six in 10 may get bigger pension due to lower life expectancy

More than six in 10 Irish people could receive an enhanced income in retirement – because ill health and/or poor lifestyle means they are not likely to live as long as their peers.

That is the "encouraging" news from Irish Life, the largest pension provider in the State, which is promoting its new enhanced annuity product.

Irish Life claims people could get 25 per cent more income from their annuity, depending on the severity of their medical conditions or history and their lifestyle.

The average increase, it says, is 10 per cent.

Among the common conditions it cites as likely to qualify for a higher income are: smoking; high cholesterol; type 2 diabetes; high blood pressure and; overweight, obesity or excessively low weight.

Chronic medical conditions

A history of serious or chronic medical conditions, such as heart problems, cancer or illnesses

such as multiple sclerosis will also entitle people to higher payouts.

The product works by determining the amount of annual income your pension pot will convert into as an annuity – an insurance product paying an annual income for life – based on an assessment of your health and your “expected future lifespan”.

By committing to pay you a fixed annual income, the insurer takes a bet on your life expectancy, and can use the extra income it earns from customers dying early to pay those who live longer than expected – or to make a profit.