Your pension pot is going to waist

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The Independent Online

The size of your waistline could dictate the size of your pension payout if plans from Legal & General, Britain's biggest annuity provider, come to fruition.

The insurer is putting the finishing touches to a pilot scheme to be launched in September in which a person's occupation and body mass index could be used to determine how long a pension holder is likely to live and the resulting payout.

The project is currently being tried out with a small number of customers.

Last year L&G kicked off moves to calculate annuity payout rates more accurately when it decided to use postcodes as an extra factor in assessing longevity.

Norwich Union is implementing a similar postcode-style system for its customers in November.

NU has said marital status and smoking habits will also be used in assessing how long a customer will live.

Until L&G's move last year, standard annuity rates were usually only based on the age and sex of an individual, so those with lower life expectancy in effect cross-subsidised the payouts of healthier people.