Smokers hit the pension jackpot, with one snag: it is only because they die earlier

The advantages of smoking do not exactly fill a long list in comparison to the health woes, cost and inconvenience that goes with the habit.

But now long-term smokers finally have some good news after a life assurance firm decided to offer them more money when they retire.

Financial solutions company Partnership has come up with the cheaper pension deal for people aged 50 or over who have smoked at least 10 cigarettes a day for the past 10 years.

Their habit will ensure a guaranteed retirement income that is "much higher" than a standard annuity, to the tune of thousands of pounds, according to the company.

The sting in the tail, of course, is that the better pension deal is only on the table because smokers usually live shorter lives than non-smokers.

Partnership claims smokers are being hit unfairly by a "double-whammy" because they are receiving the same pension payouts as non-smokers but die far earlier.

Chairman Ian Owen said: "It's an inescapable fact that the vast majority of smokers won't live as long as people who don't smoke.

"Although as a population we are experiencing increased longevity, the rate of improvement for smokers is a lot lower than for non-smokers.

"Smokers who take a standard annuity are being hit with a double whammy, which doesn't seem very fair to us. With our products, smokers will get a higher income, guaranteed for life."

Subscribers to any annuity pay a one-off payment to Partnership in return for a regular income.

But a smoker on the special policy will end up with a pension 30 per cent higher than that paid to a non-smoker because their pension fund has to last for a shorter time.

It pays out a higher rate of income than a standard annuity because it is based on the holder's actual life expectancy rather than the average for their gender and age group.

The life expectancy of a smoker in the UK is on average six to eight years lower than that of a non-smoker.

Applicants have to have a urine test performed by a nurse to confirm how much they smoke. If the first test is inconclusive, the nurse might go on to take a saliva swab.

Anyone who ultimately fails the test will be automatically switched to a different, probably lower, payment rate than they were originally quoted.

People smoking 85g of rolling tobacco a week over a 10-year period are also eligible for the policy but it does not cover cigar or pipe smokers or anyone affected by passive smoking.

Healthy people who have partners who are long-term smokers could also qualify for the better rate because the "second life" is automatically underwritten as well.

The "enhanced" or "impaired life" annuity also applies to people with serious illnesses which could shorten their life expectancy.

Simon Clark, a director for FOREST (the Freedom Organisation for the Right to Enjoy Smoking Tobacco), described it was a rare piece of good news for smokers.

He said: "I suppose this is good news. It makes a change because smokers have been used to being targeted in negative ways in recent years and there has been talk of forcing smokers to pay premiums, whether for using the NHS or other facilities.

"There will be a lot of people very interested in taking advantage of such a service because everybody knows the health risks associated with smoking but some smokers do live as long as non-smokers.

"This could benefit a lot of people."

Anti-smoking campaigners, however, were concerned smokers might see the policy as encouragement to continue with their potentially fatal habit.

Action on Smoking and Health (ASH) warned that people should not overlook the fact that the higher payments are based on the fact they they will die sooner.

Research manager, Amanda Sandford, said: "I do not think smokers should think 'I will benefit from it and it is a good deal'. They should ask 'why is it such a good deal and what is in it for the company?'

"The short answer is that sadly most of them will not live to reap the full benefits of it. If they really want to have a long and healthy retirement they should quit smoking."

But she added that she understood the insurance firm's approach, saying: "I do not think it is exploiting smokers, I think it is a realistic response to an actual situation which is the sad fact that smokers do not live as long."