Did you know that many people are missing out on the best UK annuity rates via the open market option. A quite staggering two-thirds of people buying an annuity do not shop around for the best annuity rates. This means that they are likely to be missing out on thousands of pounds worth of potential retirement income, as they may not have secured the best annuity rates on offer. The process of comparing annuities using the Open Market Option (OMO) was launched back in 2002. Under the scheme, every person with a defined contribution money purchase pension scheme is allowed to seek annuity quotes from other providers.
This isn’t like switching insurance companies at the renewal of your car insurance to save a few pounds. Different annuity providers may have vastly different UK annuity rates, so you can never be sure of getting the best deal unless you shop around properly. It’s just a shame that this important process of comparing annuities is missed by the majority of retirees, who simply take the first offer given to them by their existing pension provider.
Unfortunately there is currently no legislation which can compel potential annuitants to compare annuity offers utilising the open market option. Although there have been improvements to the information retirees receive about their various retirement options, there has not been an increase in the number of people who utilise the OMO. Consequentially, by not using OMO the retiree could miss out on increasing their retirement income by as much as perhaps 30% to 40%, should they qualify for enhanced annuity rates.
