I suspect that you are more correct than you think!
Yes, in theory, I could put my pension pot into a Self Invested Personal Pension (SIPP) which would enable me to choose where my cash was invested. In practise, as these have to be administered on a one-to-one basis the set up and management charges are high and, because of this, they will not consider setting one up for a pot of much less than £250,000.
Alas, my pot is somewhat less than this!
I have now discovered (thanks to dunstonh of MoneySavingExpert.com) why the UK company I tried to buy an annuity from would not deal with me. He told me:
"As from the 1st Nov 07 new rules came in regarding financial services. Companies now have Cross-border business, branching and passporting arrangements to deal with. That requires higher costs and a different level of regulation. It also means opting into MiFID regulation and that sky rockets the costs. So, the vast majority of UK IFAs no longer deal with ex pats. A number of providers have withdrawn as well on direct business to ex pats for the same reason."
However help is at hand. the IFA search site will now sort for IFAs opted into Mifid who will act for expats. (Thanks to EdInvestor, MoneySavingExpert.com)
So I have now been able to locate and talk to co's who are happy to deal with non UK residents.
Having obtained a few quotes I have been playing with my calculator comparing flat rate annuities against index linked.
Flat rate annuities pay a higher rate but do not increase ever. Index linked pay a much lower starting rate but the amount paid will increase with inflation. My calculator tells me that it will take 8 years for the index linked paymen to match the flat rate one. It will be 16 years before the total cash recieved will be the same on both types. It will also be 16 years before I will have recieved my total pot cash (without any interest, the interest being the providers profit!). Strangely enough if you add 16 to the normal retirement age of 65 you get 81 which is the average lifespan of a UK born male. My conclusion from this: Take the flat rate as the cash will be worth more now than in 8 years time.
Warwick, I am sure that you were aware of most of the above. I have given the information for the benefit of other readers as I am sure that I am not the only person in this situation.
Thanks for your input.