UK - Sales of enhanced annuities rose to £448m (US$739.5m) in the second quarter of this year, bringing the total sales in the first half of 2009 to £891m, Watson Wyatt research revealed.
On an annualised basis, first half sales would imply a market of close to £1.8bn in 2009, up from the record sales in 2008 of £1.4bn.
Watson Wyatt said the dramatic growth in the number of people taking out enhanced annuities - which provide bigger pensions for those with serious medical conditions or with negative lifestyle factors such as weight, smoking, occupation and geographical location - is likely to continue.
Watson Wyatt senior consultant Andy Sanders said: "The continued growth of the enhanced annuity market means more consumers are benefiting from higher pensions incomes because their medical condition or lifestyle has been assessed and a lower than average expectation of life anticipated.
"As the enhanced annuity market grows however, there are implications for the 'pool' of lives that do not qualify. This 'pool' of lives will be increasingly healthier and have longer expectations of life that need to be reflected in reductions to the level of pensions income that can be offered."
Enhanced annuities, also sometimes known as impaired life annuities, make up close to 30% of all annuities sold in the open market.
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