The past, present and the future of annuities

retirement income

Although it is no longer compulsory to buy an annuity most people are still likely to do this because they cannot afford to be without the regular guaranteed income they provide

The retirement and annuity market faces considerable change - there should be interesting times ahead. In the past most annuities were purchased from the insurer with whom the pension funds were originally invested, and the use of the open market option (OMO) was limited. Many of these were retirement annuity contracts (Section 226), some of which attracted guaranteed annuity rates although the standard rates were still attractive. The OMO was available from 1978. But it was in the early 1990s that the open market option started to be used extensively, when annuitants were encouraged to...