Around insurance and pensions circles,it has been well known for some time that the majority of people in the age group 55-64 years, with certain medical conditions, will not receive as much income in retirement as they should from their pension provider. And they are not losing out on ‘chicken feed’ either. According to MGM Advantage, a 65-year old with average health impairment could look to receive an extra 8,684 GBP during the first five years of drawing the annuity income. This extra requires the retiree to choose the right annuity. This may not be available from his current pension provider, and the prospective retiree should take advantage of what is called : the Open Market Option (OMO). Under the OMO, a person approaching retirement can shop around for the annuity that best fits his circumstances, even if that means transferring to another pension provider.
moneyfacts.co.uk says that qualifying conditions for an enhanced annuity include high blood pressure,high cholesterol, heart disease and diabetes, while higher amounts can be paid-out to smokers as well. The issue is that people approaching retirement and due to arrange for their retirement annuity income to start are ignorant as to what is available to them. They may not know they can shop around for a better deal elsewhere.They may not even know what an annuity is, let alone the OMO.
The clear message seems to be : before signing-up for a particular annuity it pays to obtain quotes for comparison with those being offered by their current provider. In these times of austerity and low interest returns to savers, few can afford not to shop around. Not doing so can mean leaving large sums of money on the table, perhaps losing a benefit of as much as 50% increase in income over the period of retirement, and not where it should be, in the pensioner’s pocket.
Nigel Barlow, head of retirement at Just Retirement said : “Many of these people might now qualify [for an enhanced annuity] if they only knew about it.” Other experts have also gone on record to implore those approaching the time to decide where to obtain their annuity income to take action and not allow themselves to “to slide passively into poor retirement arrangements which will actually condemn them to a lifetime of low retirement income.”(Eddie O’Gorman of The WAY Group), and Ros Altmann,of Saga, says that it is a case of trawling the pension annuity market and being aware that you do not have to take the annuity income offered by the company you have saved your pension with.
So if you feel you should take action, and need more information, why not Google the organisations named in bold above. Do take appropriate professional advice. The60life should be the time of your life – it does help to have the best financial base that you can obtain, and to which you are fully entitled.Good luck!
Great article! Keep up the excellent work.