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Open Market Option Still Not Being Used
Posted by:
Rachel Jefferson
on 14 February 2012
In my 16 years in this industry, it still amazes me that people do not take advice when they decide to take their pension benefits. For me, this is one of the most important times in an individual’s life when they should be taking advice to ensure they are making the right choices as they step into the unknown world of retirement. Today, this is even more important with gilt yields hitting very low levels.
The problem is that insurance companies still issue a whole range of annuity quotes in an individual’s retirement pack. It will mention 'shopping around' and using the 'open market option', but they still do not do enough to encourage people to take specialist advice. In many cases, individuals complete the forms and return them to the ceding scheme, giving no thought to medical history, lifestyle etc.
I therefore, strongly agree with the National Association of Pension Funds (NAPF) and the ABI consultation that proposes to create a code of conduct in which insurers no longer send annuity quotes and better explain the shopping around process. It also suggests that the code must also give scheme members a list of ‘specialist annuity providers’. Without a quote in the first instance, surely it would encourage more people to seek financial advice.
Tags:
retirement
pension
open market option
advice