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Providers urged to make annuity customers aware of OMO
4 August 2008 11:57
Retiree solutions provider Just retirement has called on pension firms to do more to make customers aware of their right to transfer their annuities to another company.
A recent review by the Financial Services' Authority (FSA) found that a large minority of providers did not furnish retirees with substantial information on the Open Market Option (OMO), while most of the annuity transfer cases assessed suffered from delays.
Just retirement's marketing director David Cooper has responded that with just two in five people currently taking advantage of this option, there is clearly scope for them to improve their income and standard of living in retirement.
He therefore warned that too many pension firms are misinforming their customers, preventing them from making correct choices about their annuity incomes, a situation he said could worsen as the pension market expands significantly over the next five years.
Mr Cooper also expressed concern about the current time lag in annuity transfers and backed the FSA's advocacy of a ten-day maximum period for moving funds, as well as its efforts to streamline this often overly complicated process.
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