Hope for those with small pension pots

Just Retirement today warned that retirees with small pension pots of as low as £5,000 could be missing out on an uplift of up to 40% by not utilising the open market option (OMO).

Just Retirement provides annuities for funds as low as £5,000 (and sometimes less) and offers significant enhancements for those with medical or lifestyle conditions. When obtaining quotes it is important that clients provide details of any condition they may have to ensure they get the best possible income for the rest of their life. This is equally true for advisers using portal systems to obtain quotes to ensure customers are treated fairly.

"Obviously anyone whose total funds are less than £16,500 is entitled to commute their pension for cash but those with small funds should consider any pensions they may hold elsewhere and seek to consolidate them if at all possible to get the best possible deal on all sources of income in retirement.

Just Retirement's David Cooper commented: "Remember the annuity decision is one that lasts for the rest of your life - so it is important to get it right whatever the size of your fund. Obtaining a quote for an enhanced annuity from Just Retirement need take no longer than a standard annuity and could increase your income by up to 40%, possibly more for those with more severe medical conditions. Our minimum premium applies to the total pension fund, so individual funds of considerably lower than £5,000 can be accepted provided the total reaches £5,000. This can make a big difference to standard of living in retirement but is often not clearly explained at the point of retirement by the pension provider - as highlighted by the FSA."