Do you realise that even if you have been saving into a pension scheme with the same provider for your entire working life, when it comes to choosing how your pension fund is paid out, you have a greater range of choice than you may be led to believe.
Just as there is no reason you should buy your house insurance from the company that provides your mortgage, the same rule applies to your pension. And just like when you buy any type of financial product, shopping around could actually make your assets work far better.
Though pension providers would like to keep your custom forever, you are not actually tied to using them for your retirement arrangements, even if they hold your pension fund. In addition, moving away from your existing provider could actually enable you to get a higher level income throughout your retirement.
How the Open Market Option Works
Any pension facility is divided into two separate sections:
– The first is the pension scheme itself. This is the facility used to build up your funds during your working life into your final capital sum known as your pension fund.
– Once you decide to retire and start to draw an income from your pension, you move into the second phase. This where you convert your pension fund (less any lump sum you take) into either an income drawdown facility or pension annuity.
And though your pension provider is likely to provide you with annuity quotations from their own product range, the Open Market Option ensures that if you choose to buy a pension annuity, you have the freedom to choose a product supplied by anyone in the financial market. All you have to do is shop around and find the best product for you.
The Benefits of Shopping Around For Pension Annuities
Though it may be easier to opt for a financial product that is right in front of you, shopping around is always going to be the better option.
Whether it ultimately turns out that your pension provider does give you the best rates, it is only by comparing the annuities throughout the market that you are going to be certain you have made the most of your money.
Certain annuities will pay out far better rates or may offer a greater guaranteed period for specific products. Annuities can be found to suit your specific needs, you just have to know where to look.
How to Shop Around
Though it is possible to trawl through the great range of financial papers and online resources to get information on basic pension annuities, this can be a complex and time consuming process.
However by seeking the advice of an Independent Financial Advisor not only can this decision become a whole lot easier, you will also have access to an even greater range of options.
Independent Financial Advisors can provide advice on any pension annuity in the market including a range of enhanced and guaranteed annuities that are not available to the general population. Such products can provide much better monthly return during your retirement and can also compensate for medical or personal circumstances that can influence the level of income you qualify for.
So to make sure you get the most from your pension fund take the Open Market Option. Talk to an Independent Financial Advisor who specialises in pension annuities and see how you can take steps to maximising the benefits from your pension fund today.
