It is great news that the government and the Pensions Regulator have recognised that there is an issue with the way pension providers communicate to people about their options on retirement. I have been calling on the Regulator to ensure the annuitisation process works better since 2002 but still too many providers are engaged in sharp practices that leave pensioners with inadequate retirement income.
Providers need to play fair, be open with people about their options and ask the right questions when people call for an annuity quote to make sure that if they qualify for an enhanced annuity they get the best rate available.
Too many people do not consider a joint life annuity, which risks leaving their partner with no private pension and dependant on means tested benefits.
As annuity rates have worsened and the gap between best and worst annuity rates has widened, it is even more important that regulations are tightened to protect customers properly.
This problem is not just about occupational pension schemes but applies to all personal pensions. Therefore we need a joint regulatory crackdown by both FSA and the Pensions Regulator to ensure the OMO process does actually work.
In the absence of this I would urge consumers to carefully consider their options and shop around – do not accept what is offered by your pension provider. Having done the right thing and saved for their retirement, too many people are missing out."