The easy answer is you must be a smoker to get a smokers annuity. When you decide to buy your pension you take your pension pot (after in most cases after taking your tax free cash) and approach an insurance company to purchase your pension (annuity).
You do not need to purchase you annuity from the same provider who has managed your pension you can elect to go the market to find the best rates available and transfer your pension to the new provider – broadly this is taking your ‘open market option’.
However if you are a smoker you can apply for a ‘smokers annuity’ – the definition of a smoker is broadly 10 cigarettes a day and you have smoked for at least 10 years. Please check the providers definition as the information here is only a guide.
You may think its not worth the trouble of moving your pension pot around but on average you can usually gain around 20% against a non-smokers annuity.
In the first instance you should approach your existing provider and ask if they provide rates for smokers, you can also look to the annuity market for quotes. Liverpool Victoria now re branded as LV= and specialized annuity providers like Just Retirement are a good start.
Using the services of a financial advisor is a good idea as smokers annuities are far more complex than taking a standard product. You will need to complete a medical questionnaire and the provider may contact your doctor to check your smokers status.