What is the Open Market Option?

The Open Market Option means you are free to shop around and choose who you purchase your annuity from. Annuity rates can vary considerably between providers and, even with one provider, the rates can differ according to the annuity options you choose. The top provider for one set of options may not come out on top for another set.

Some providers may only accept pension funds above a certain value, and the minimum will also vary between providers. Prudential's minimum for a Guaranteed Pension Annuity and Inflation-Proof Annuity (called the Index-Linked Annuity) is £10,000 after tax-free cash. If your total pension fund from all sources is small, you may not be able to use the Open Market Option because of this size restriction.