In an interview with this month’s Retirement Strategy, Liberal Democrat Shadow Works and Pensions Secretary Steve Webb says the open market option should be the default for customers approaching retirement and that they should be contacted by a third party rather than their pension provider.
In an interview in this month’s Retirement Strategy, Webb says people should default into a situation where they have to choose who they buy their annuity from as “a ludicrous proportion” of people buy an annuity from their pension provider.
He says a firm other than the provider should run through a client’s retirement options and stress that they are under no obligation to annuitise with their provider.
Webb says: “You could do that with Omo. Instead of the default being the provider where you get your annuity from, you default them to something else or default them to nothing and make them go and choose.
“Presumably, most people who buy an annuity buy a lifetime annuity, unindexed, with nothing for survivors. It surely does not get any simpler than that, does it? So, would you like more money or less money? If we can’t get that one right, we really are in trouble, aren’t we?”