Income in Retirement, ‘Open Market Option’ and Getting Value for Money
At Hoskin Financial Planning, one of our biggest passions is ensuring our clients get value for money!
A specialised area where we can assist our clients is exploring their ‘Open Market Option’ when approaching retirement.
We live in a society where we shop around for the best deals; whether that be insurance, finance or goods and services. Not a lot of people know (excuse the Michael Caine line) that you can also shop around for your pension annuity. You don’t have to take the annuity offered by the pension provider that you have been saving with throughout your working life.
Indeed, more often than not, you can get better terms from an alternative pension annuity provider; especially if you are suffering ill health such as blood pressure issues or even if you are a smoker.
Buying a pension annuity is an important one-off decision. An annuity converts your pension fund into a regular income; this income will be with you for the rest of your life. It is vital that you make the right decision and get the most from your pension fund, once you have purchased your annuity you can’t change it – it is a one-off purchase!
There are many types of annuity available with different options attached to them. Deciphering the jargon and terminology can be daunting and making the right decision with regards to the options available is also important. The more options you choose, the less income will be received. You need to weigh up the cost of the options with how important they are to you i.e. providing an income for a spouse.
The shopping around for an annuity process is known as exercising your ‘Open Market Option’.
An Independent Financial Adviser would assess your existing annuity offer and evaluate any guarantees or features that are worth retaining. They will research the whole of the pension annuity market to ensure that you get value for money and the best possible deal. If it turns out that the annuity offered by your existing provider is the most effective, value for money solution then you would have made an informed choice and have peace of mind.
So, if your final statement from your pension provider has just landed on your doormat or you are expecting to retire shortly and take the income from your pension. Please make sure you shop around.
Use your ‘Open Market Option’, you’ve got nothing to lose.
You can’t change your annuity once you’ve bought it, so pick the right one!
Make sure you seek Independent Financial Advice.