Yahoo Finance Tens of thousands of people have just days left to cash in £730m pension offer
A deadline is fast approaching for more than 30,000 savers to take advantage of a one-off offer to get a huge boost to the value of their pensions.
The policyholders, of mutual Royal London, must decide by 12pm on 19 October whether or not to take up the deal, worth as much as £720m in total.
Telegraph Moneypreviously revealed how the insurer was offering customers the chance to give up valuable "guaranteed annuity rates" in return for an increase in the value of their pension.
In one example, a customer with a £30,000 pension pot would be given an extra £18,000 if they agreed to give up their right to the guaranteed annuity. Guarantees were embedded into millions of policies in the Eighties and Nineties and give access to far higher rates than are available now.
A conventional annuity bought today pays around 5pc, guaranteed rates typically pay at least double that.
Royal London said it was making the offer to customers because the "pension freedom" changes meant more people might feel buying an annuity "isn't the right choice".
Savers must make a decision online or via post by Friday's deadline. Alternatively they can attend a special meeting on October 23. If three-quarters of policyholders vote in favour, Royal London will go to court in November to get approval for the deal. If it goes ahead, the guaranteed rates will be removed on December 7.
Steven Robinson, of financial advice firm Clarke Robinson & Co, said he feared savers would be confused by the paperwork.
He said: "I think the offer from Royal London is reasonable, they aren't trying to take advantage of people. Unless you are able to make full use of the guaranteed rate then the cash boost option is a viable alternative."
Royal London are also offering up to £860 per customer towards the cost of speaking to a financial adviser about the matter. As when transferring a "final salary" pension, you must take financial advice if the pot is valued at £30,000 or more.
If your policy meets the requirement to take financial advice and you don't respond, nothing will happen to your policy.
Royal London would not disclose how many customers had cast their vote so far.
When the offer was first launched, in March, a spokesman said the offer would allow customers to "obtain value for their guarantees" and also "enjoy pension freedoms if they wish to".
Reforms dubbed the "pension freedoms" mean over-55s can spend their pensions how they wish, including cashing in the whole lot. The Royal London policies were taken out decades before the changes, with the firm arguing the offer enables customers to make better use of the flexibilities the reforms now afford.
sam.brodbeck@telegraph.co.uk
