By Clare Yates
4 min read
Weight loss injections have been receiving a lot of attention lately, and for good reason. They can help people shed pounds fast, improve health markers, and reduce the risk of serious conditions like type 2 diabetes and heart disease.
For many, these are profound benefits worth celebrating. But some financial advisers have been raising awareness of a lesser-known financial side effect of these treatments.
If you choose to use an annuity to turn your pension savings into guaranteed income, you may be eligible for more income if you have a body mass index (BMI) above a certain level.
That’s because annuity providers offer enhanced income on account of a higher BMI, as well as certain health conditions or lifestyle choices such as smoking. It’s why weight loss could reduce the income you are offered.
How annuities work and why weight matters
When you buy a lifetime annuity with some or all of your ‘defined contribution’ pension pot, annuity providers calculate your annual pension income based on factors such as your age, postcode, health and lifestyle choices such as smoking and drinking.
If you have certain qualifying health conditions or a higher BMI, providers may offer you an enhanced annuity. This pays a higher guaranteed income because, statistically, someone with a shorter life expectancy is likely to receive payments for a shorter period, so the regular income offered is higher.
Pense, a pensions advice platform, told the Times that people who are overweight could get an annuity that is 17% higher. Alan Lakey from Highclere Financial Services told the same paper: “Someone with a BMI classed as obese will be receiving more than someone who is within the normal boundaries – it’s the impact on longevity.”
On the idea of securing an annuity before tackling your waistline with weight loss injections, he added: “It would make sense for anyone doing that to take that viewpoint, it’s playing the system I guess but that’s how the system is designed.”
It is also worth bearing in mind that weight loss injections are often linked to health conditions annuity providers already take into account. Some treatments, such as Ozempic, were originally developed to help manage type 2 diabetes and are still prescribed for that today. Others, including Mounjaro, are used to support weight loss in people who may be living with conditions like high blood pressure or high cholesterol.
These are among the health factors annuity providers look at when setting enhanced annuity rates. In some cases, they can lead to a higher guaranteed income for life.
So where do weight loss jabs fit into all this?
Enhanced annuity rates are based on your health at the point you buy the annuity. Someone who has lost a significant amount of weight through injections could receive a lower annuity rate and income than they might have done previously.
Improved health and a lower BMI are linked to longer life expectancy, which generally means providers expect to pay income for longer, and therefore offer less income.
However, if losing weight does indeed extend your life expectancy, remember that you would receive your annuity income for longer. That could mean losing weight actually leads to receiving more income in the long run.
Let’s be clear about priorities
The health benefits of losing excess weight are very real and, for many people, life-changing. Better mobility, improved blood pressure and a reduced risk of serious illness are all significant positives in their own right.
While a higher annuity rate and income may be attractive, the value of living a healthier and more active life for longer is more important. We are definitely not saying that someone should avoid losing weight just to potentially get more annuity income!
What income could you expect from an annuity?
If you are over 55 (over 57 from April 2028) and thinking about buying an annuity in the near future, now is a good time to start looking at what income you might expect.
Get your free annuity quotes for an instant estimate of your potential income. The initial quotes are based on standard rates - but through Compare More you can find out if you qualify for enhanced rates on account of your health, BMI or lifestyle.
Compare More’s selected annuity specialists will be happy to take you through a health and lifestyle questionnaire to see if you qualify for an enhanced annuity. They will also search for the best available rate and income from the UK’s leading annuity providers.