Scottish Widows has introduced a three-month grace period for customers with valuable guaranteed annuity rates.
When the pension freedoms came into effect in April, the firm changed its policy so people with GARs embedded in their policies would not lose them for three months after their nominated retirement date.
Previously, the provider would honour the GAR for up to a week, but only in certain conditions such as illness.
Scottish Widows retirement propositions director Stuart Paton Evans says: “We recognise that people have a wider choice than ever before and want to ensure they have enough time to make an informed decision at retirement and seek financial advice where appropriate.”
Closed-book provider Phoenix Life says it already offers a 90 day grace period where a GAR applies only at a fixed point, known as the spot date.
A Standard Life spokeswoman says the company has not applied a cut off point since 1999.
Likewise, Aegon customers can claim their GAR indefinitely, but Prudential say they have an informal grace period of a month.
Dobson & Hodge financial services director Paul Stocks says: “It’s a welcome move, but I suspect firms that are extending grace periods are actually doing it for another reason such as they are struggling to process paperwork quickly.”