Less than a third of consumers find annuities acceptable, according to a survey by Skandia.
The number of people who find having to buy an annuity acceptable has fallen from 57% to 30% since 2001.
Meanwhile the popularity of income drawdown has risen dramatically since A-Day. Skandia’s income drawdown sales rose 259% in the twelve months to April 2007 compared with the previous year.
Nick Bladen, head of pensions marketing at Skandia, says: “The concept of forced annuitisation is clearly still unacceptable to a significant group of people, so advisers have a crucial role to play here in opening up other options to their clients. For many people, the freedom of being able to keep their pension fund invested and maintain greater control is an attractive choice."
Skandia offers advisers an income drawdown simulator tool to evaluate the risks and support decisions at retirement. The tool can construct income drawdown portfolios, select withdrawals and track fund values based on performance data.
The research follows recent news that more providers could launch 5 for life-style products later this year. The model combines the guaranteed income of an annuity with the benefits of income drawdown.
Last week Axa told IFAonline it would launch a 5 for life-style product in the autumn.
Standard Life could also introduce a ‘5 for life’ product if Government legislation on the maximum payment from income drawdown plans changes.
To comment on this story contact:
Tel: 020 7034 2679
E-mail: [email protected]
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation