The Association of British Insurers (ABI) is to offer new guidance to providers of pension annuities over the so-called “wake-up” packs which get sent to those approaching retirement. It is designed to help those with defined contributions, and urges those in receipt of the packs to exercise their Open Market Option (OMO), basically to shop around for an annuity.
The new advice includes..
- A prompt for retirees to read the contents of the pack.
- More emphasis on the need to shop around.
- A timeline on the benefits.
There is also a call for retirees to consult the Pension Advisory Service’s online financial planner as well getting annuity providers to contact retirees before the 4 – 6 months retirement date. Maggie Craig director of the ABI said this showed a real determination by the pension industry to provide clear and valuable information. However some within the pension industry have criticised the efforts to promote the OMO. Steve Lowe from Living Time there was “little evidence success”. And judging by the amount of annuitants who used the OMO, woefully low at around 35%, he may be right.
