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OMO should include joint life default option: Lamb
Norfolk IFA Carl Lamb has called for joint life annuities to be made the default option for married couples to prevent one partner from plunging into poverty when the other dies.
Mr Lamb, director of Norwich-based Almary Green Investments, said he “wholeheartedly” supported the idea because too many women today retire on meagre pensions and often rely on their husbands to support them in retirement.
He said: “If individuals do not take advice at retirement and just accept what they are being offered by their provider, they are likely to buy a single life annuity without realising that their spouse could end up living in poverty in old age.”
His comments follow an industry-wide initiative, led by the Association of British Insurers, to encourage providers to promote the open market option to clients so that they can shop around for the best annuity at retirement.
Mr Lamb said: “The fact that few advisers would be willing to help people with small pension pots after the retail distribution review makes the potential for people to make the wrong choice even greater.
“Even if an individual shops around online, he is likely to be tempted to buy a single life annuity when he sees how much more it pays initially than a joint life one, without realising the benefits of a joint life annuity.”
Although the government is not considering making joint life annuities a default option for married couples, Mr Lamb urged politicians to address the issue as part of its wider move to promote the open market option.
