Just Retirement estimates retirees missing out on £500m

Following the release of the FSA's interim findings on the progress of the Open Market Option, Just Retirement today urged the industry to take greater steps to ensure that retiring customers are made more aware of the availability of the Open Market Option.

The ineffectiveness of the current regime means that Britain's pensioners could be missing out on over £500m per annum, Just Retirement estimates.

David Cooper, Marketing Director at Just Retirement comments: "This interim report is a real wake up call for all those involved in the retirement industry. The use of the Open Market Option is fundamental to the FSA's principles of Treating Customers Fairly (TCF). Customers should be given simple, clear and unequivocal information about how they can shop around for the best annuity rate in addition to having their health taken into consideration. Disappointingly, there is continued evidence that customers are not being made aware of this aspect in the information they are being given by their pension providers.

"As increased numbers of people approach retirement it is even more vital that the OMO becomes commonplace. We calculate that retirees are currently missing out on £500 million per annum* by not using the OMO and being assessed whether they are eligible for enhanced annuity. For many this has a material impact on the quality of their lives in retirement.

"Just Retirement wholeheartedly supports this ongoing activity by the FSA, ABI and advisers to raise awareness of the OMO. Via our Campaign for Better Annuities we have witnessed first hand how committed advisers are to providing quality advice around the OMO, with over 4,500 having signed up to date. What's needed now is for greater guidance to be made available to people coming into retirement, enabling them to make the right decisions for their retirement plans and to claim the retirement income that is rightfully theirs.