There is still evidence of a lack of awareness about pension annuities and the open market option (OMO) … the right people have to shop around with their pension fund for the best annuity rates.
A leading annuity provider, Just Retirement, has released results of a survey that shows around 73% of people of retirement age do not understand what a pension annuity is. Further, around 80% admitted that they have never heard of an OMO.
Around 59% of respondents who said they understood what a pension annuity is could not accurately decribe one.
It really is a sad state of affairs with such an important issue that well over two thirds of Britons at retirement age do not understand what an annuity is, with 28% admitting they have never heard of the term.
We definitely need more customer awareness of annuities and the OMO. Lack of knowledge can lead to retirees buying the wrong annuity and getting a lower retirement income than they are really entitled to.
We do need the government, the Financial Services Authority (FSA), and the Association of British Insurers (ABI) to do more to get the message across; to help people buy the right annuity.
