Enhanced annuity 'maximises retirement income'

Tuesday, May 11th 2010

Pension holders could boost their retirement income through an enhanced annuity, but only a small percentage do so.

According to Mike Fuller, chief executive officer of Just Retirement, the Open Market Option (OMO) was only taken by 36 per cent of annuity clients last year.

The Pensions Regulator explains this option allows members to buy annuity from a company they choose, using proceeds from their existing fund to do so.

Mr Fuller said OMO use could be boosted by communication improvements, better efficiency and streamlining applications and advice.

Experts predict more than 40 per cent of retirees could qualify for enhanced annuity, but just eight per cent currently do so.

Just one way to maximise income would be to give full disclosure of any medical conditions.

Those with more than one condition stand a better chance of getting enhanced annuity and providers could raise awareness of these issues, Mr Fuller added.