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Imagine a world where every meal is baked beans, every holiday a fortnight in Bognor Regis, every car a silver hatchback and every retirement income product a lifetime annuity.

We are all used to buying food, holidays and cars which suit our personal taste. The exception is the retirement market where the vast majority of retirees roll their pension fund straight into a lifetime annuity at the point of giving up work. This is typically between age 60 and 65 when they are in good health and receive little uplift from the mortality pooling effect.

Are they as well served as they could be? Are they aware that there are dozens of products and providers that can be mix and matched to create individually tailored solutions? There are enhanced and impaired life annuities for those with compromised life expectancy, along with fixed-term annuities for those who need income security with flexibility. Those willing to take on investment performance risk can choose from with-profits, unit-linked or variable annuities, phased retirement or pure income drawdown.

The retirement income market is vibrant and innovative, as you would expect, given the forecasts that it is likely to double in value to 30bn a year over the next five years.

But this message does not seem to be sinking in with consumers or changing their behaviour. Even now, only about a third of lifetime annuity buyers take their pension fund to the provider giving them the highest income, a figure that has barely changed in years. Many retirees still simply do not know that they have any alternative and once the lifetime annuity contract is signed, there is no going back, regardless of how their circumstances change.

The weakness of the open market option was highlighted recently when the FSA revealed that more than a third of pension companies are not producing paperwork that complies with treating customers fairly rules, despite it being six years since they were first compelled to tell clients reaching retirement about their options.

The real Omo failing is that it has become synonymous in people’s minds – many within the industry and media as well as the general public – with the right to shop around solely for a lifetime annuity, rather than the right to shop around for the best retirement income solution. In effect, Omo as it stands is no longer fit for purpose because it limits choice instead of promoting it. Its failings are widely accepted and only last week this esteemed publication called for reform with the bold statement that “the status quo is not an option”.

Into this clamour for change, Living Time has launched a high profile campaign to encourage everyone in the industry to unite to ensure retirees are for the first time given all the options, allowing them to find the solutions that best suit their personal circumstances.

Living Time is working with independent organisations to help advisers make the transition and with industry leaders to embrace and drive through change.

To begin our campaign, we are urging support for a rebranding of Omo from open market option to Offer More Options in recognition of the need to promote the wider consumer choice that exists.

Few retirees are ever going to become retirement income experts, so it is up to us – providers, advisers, and regulators – to develop the new procedures needed to allow people to benefit from freedom of choice with no inbuilt historical bias to any single solution.

These are early days of an exciting campaign but the first contacts have already yielded positive results.

Some key adviser companies and annuity desks have shown themselves keen to extend themselves beyond lifetime annuities (some groups have already started the change process) to embrace new thinking that better meets client needs, which fully conforms with TCF and the retail distribution review and which gives them a headstart in this rapidly expanding and highly lucrative market.

We want other forward thinkers to join our Offer More Options campaign to question conventional wisdom and to help promote a thriving 21st Century retirement income market.

To register your support for the need to change or to express your views, please email me at offermoreoptions@

Dave Harris is sales and marketing director at Living Time


Premier Group recruits extra advisers

Midlands-based IFA The Premier Group plans to recruit 15-20 extra consultants by the end of the year to diversify its business and raise the level of support and services.

World view

It would seem that the expanding fund universe should offer plenty of choice for advisers. However, the fund universe isn’t really growing, at least not as much as one would expect, considering that there have been nearly 500 launches in the past five years. Numerous closures have kept the overall number of funds fairly consistent for much of the past decade.


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