Are you approaching retirement, and thinking of transforming your pension pot into a regular income, by purchasing a pensions annuity?
If so, then like many people, you may be one of the many people each year who forfeit £1000s of pensions income, by simply taking the first annuity offer that comes along. This is most likely based on annuity information in the brochures pack they will receive, six months before they retire, from their pensions provider.
The Financial Services Authority has on several occasions had strong words with the pensions companies, over their failure to fulfil their obligations in this regard. Insurers are legally obliged to make it clear to consumers that it is their good right, not to mention very prudent, to compare pension annuity deals by making use of the ‘open market option’, or OMO.
The OMO simply means that, by working with an independent financial adviser who can trawl the whole annuities market, consumers can seek out the very best annuity rates of the moment. This can often add up to £1,000 per year to your retirement income.
Your can also set up your pension to pay out to your spouse after you die, and for the rest of their life. Alternatively you can include a guarantee that will ensure your pension pays for a fixed term of 5 or 10 years, even if you die before the end of that time.
Furthermore, if you are a smoker or have a medical condition, you could be eligible for an enhanced annuity, or an impaired life annuity, both of which will give you a considerably higher pension income for the rest of your life.
Were you made aware of your right to shop around by your pensions company? Blog here!
