What is the Open Market Option?
The open market option gives you the opportunity to shop around for the best annuity rate in the UK. It is available on both standard annuities or “with profits” annuities.
The quote provided by your pension provider is something to consider as well, taking it into account when looking at options. If your pension has been around for some time, you may be able to get a Guaranteed Annuity Rate (GAR), which could be higher than most annuity rates today.
The open market option compares annuity rates that are out there, and gives you a greater amount of choice between annuities, in order to find the best one for your individual situation.
To compare annuity options, use our handy annuity comparison table.
Do I need a different annuity if I have bad health?
Annuity rates tend to vary. By shopping around you can receive up to 40% more money. You will be unlikely to change annuities later so you will have to get the best option first.
You will have to look into annuity quotes that consider your medical records, as well as lifestyle in order to get the best rate. You might be able to get a higher income if you have bad health.
Can I change my annuity later in life?
The open market option means you can and should shop for the best annuity rate before buying. It is important to understand that you are not tied to your pension provider’s annuity rate and can change this before buying. After you purchase an annuity, however, you may never change it.
You can get quotes on annuities from our website by clicking here. Alternatively you can discuss your options with an independent financial adviser, who will tailor the information to your needs, using our annuity enquiry form.
What if my pension does not allow the open market option?
Pensions that do not offer the open market option are not allowed, but some may still exist, having been opened before the legislation on the open market option began. However, companies may word the open market option in a way that is difficult to read for most people, so it is important to be sure about it before automatically signing up to the annuity rate given to you by your pension provider.
Purchasing a join annuity means that the income will be greater but paid for a shorter amount of time. If this route is taken, it will be important to shop around for a good rate on a survivors pension as well. Which will provide for the surviving partner.
Have a look at further news on annuities in our news section.