The open market option, PICA, and finding the best UK pension annuity rates, is an important development in the UK pension and annuity market. The emergence of the Pension Income Choice Association (shortened to PICA) has been well received by an industry desperate to help retirees become more engaged with their at-retirement options. While there have been several (insurance company) provider-led initiatives aimed at raising awareness of the open market option (shortened to OMO), take up rates have remain stubbornly stable around the 40% level for many years.
In their recently launched report Optimising Value in Retirement PICA put together a series of recommendations aimed at making retirees more aware of the options available to them. These included making OMO the default option for anyone deciding to take a retirement income, helping them to get better UK annuity rates. The report also called for a register of financial advisers to be set up to provide advice to those with pension pots of less than £50,000. Apparently, early responses to the report has been really good and we’ve seen Steve Webb of the Lib Dems coming out in support of its recommendations, commented PICA interim-chairman Tom McPhail, of Hargreaves Lansdown.
There have been various meetings with politicians and industry regulators with positive feedback. PICA have been challenged on some of the things they’ve put forward but it’s all been constructive and made them refine their way of thinking. Their key position is to make shopping around using the OMO the default process, as the current system doesn’t work. PICA have met some resistance against those who don’t feel that we should force people to make a choice but even if they don’t make a decision they’ve still made the choice to stay with their pension provider. PICA want to make the decision making process more informed.
