Open Market Option
Having built up your pension savings, when you wish to take your benefits, your existing pension provider will usually offer you a Pension Annuity, but you do not have to purchase your annuity from the company used to build up the fund. You have the right to take the Annuity from any provider you wish. This is called the “Open Market Option”.
Annuity rates vary greatly between insurance companies. Whilst your existing provider may offer you an annuity income, this may well not be the best available. You can therefore exercise your Open Market Option and shop around to see what rates or arrangements other insurance companies can offer.
The best rates available on the market could be considerably higher than the worst rates. The rate that you will receive will be for the remainder of your life and if you choose a joint life annuity, then for your spouse’s or civil partner’s life.
If you have an Occupational Money Purchase Pension, the trustees of the scheme may buy your Pension Annuity for you. However, you can also exercise your ‘Open Market Option’ to find a better alternative.
We may be able to find better rates with only a few basic details from you.