Consequences of open market option

The theory is that this will stop people ticking the box next to the highest number, with no idea of the implications of their decision. Instead they will be expected to read through a small forest of paperwork using alien phrases and concepts to reach an informed decision.

Having reached a decision, the plan holder will need to ask their insurer for a form to convert their pension into an income. They will ring the insurance company with who they have had some kind of relationship, possibly for decades, to ask why there were no forms to sign in the pack. And then what happens once the friendly insurer’s customer service team gets a very warm lead on the phone?

“You want to transfer your fund? To another provider? Well, that can take up to six weeks you know. Why don’t you take out your annuity with us? Yes, I agree, our rates are not necessarily the best in the market. But do you really want to fill out a 17-page questionnaire to see if you can get some more income? Isn’t your blood pressure high enough as it is? And then wait six weeks for the money to transfer and another two weeks for your annuity to be set up? If you sign this form I will send you now you could have your tax-free cash next week, and your first income payment a few days after that. Now, isn’t that worth sacrificing a few pounds a month for?”

Katherine Oxenham

Annuity Direct

Isle of Wight