The under selling of enhanced pension annuities in the UK is being partly fueled by a lack of adequate probing by those advising potential annuitants, it has been argued. Paul Green from SAGA has suggested that some providers may not be asking the right medical questions which can ultimately lead to eligibility for annuity enhancement.
He said that…”..too many companies simply do not ask a health question and thereby deny people a much improved pension for the rest of their lives.” He also gave backing to the argument that OMO also known as shopping around for an annuity should be the ‘default’ option for those reaching retirement. At the moment, annuity providers are not compelled to force retirees to compare annuity offers from rival providers. This means that thousands of them fail to receive the best annuity deal, missing out on a potentially higher pension income.
Although the pension system will soon experience a widespread shake-up to it’s rules, some industry observers have noted that the most important change – forcing providers to make OMO the default – was omitted from the legislation.
