Pensioners risk losing ‘thousands of pounds’

Pensioners are in grave danger of missing out on the best annuity rates because of endless delays in transferring their funds, warns Steve Hunt, managing director of Rockingham Retirement, the UK’s largest wholly independent retirement income broker.

Despite last year’s plummeting stock markets, annuity rates have broadly held up well – but with continuing market volatility pensioners need to move quickly to take advantage of the best deals.

Yet foot dragging by major providers has frustrated many pensioners who now want to switch their pension funds and take advantage of one of the many excellent open market options, rather than stick with their provider.

In an attempt to galvanise the major pensions’ firms into swift action, Hunt has written to the chief executive officers of over 30 of the top pension providers, outlining the difficult scenarios faced by many due to unacceptable delays in the transfer of funds.

“It is an absolute disgrace that some insurers and pension companies are taking so long to process pension transfers and open market options.

“The delays puts the retirement income of many people at risk and will often cause significant difficulties for people at an already very stressful time of their life.

“Some pensioners are in danger of the annuity rate falling before their funds are transferred, which could potentially cost them thousands in lost income,” he said.

“The sooner the FSA clamps down properly on the manifold inefficiencies, the better. I have asked the CEO’s of the top insurance companies to contact me to discuss this further so that we can work together to bring these problems to a satisfactory conclusion,” added Hunt.

The ultimate aim is to encourage these companies to work with Rockingham Retirement and utilise the state of the art technology which RR has available to expedite these transfers.

“It could be a matter of a few weeks, but when it is your retirement pot you are talking about, it can make a massive difference to your monthly income – and at a time when pensioners are suffering like never before, pension providers need to get their act together and move fast to allow retired people to secure the best rates,” said Hunt.

The move represents the opening shot in a campaign planned for 2009 to bring to the FSA’s attention the unacceptable time delays for pension fund transfers and open market options, and the consequences for pensioners. Rockingham Retirement will be monitoring the responses and acting accordingly.