Only 10% of advisers would look to purchase an annuity with the whole amount of their pension savings, according to Skandia.
The research also found over half of advisers would use their entire pension savings to go directly into income withdrawal, while 38% would use a combination of income withdrawal and an annuity.
Their reluctance to embrace annuities for themselves has made advisers more likely to recommend income withdrawal to their clients, with 61% of advisers expecting income withdrawal business to increase over the next year.
Nearly a third of advisers surveyed felt income withdrawal is appropriate for over half of their clients, while a further half of advisers believe it suits over a quarter of their clients.
The research indicates advisers and consumers are becoming increasingly proactive in seeking to avoid the inflexibility of an annuity, Skandia says.
It believes income withdrawal could be the flexible solution many are looking for to enable them to actively control their retirement income in line with investment markets and personal circumstance.
Income withdrawal also provides greater control on the format and direction of death benefits, Skandia says.
Concerns have been voiced for some time now around the inflexible nature of annuities, says Nick Bladen, head of pension and bond marketing at Skandia.
”There was bound to be a reaction to this and the market has responded by looking to other retirement solutions that could take a client effectively through the accumulation and decumulation phases of their retirement planning, with total control.”IFAonline
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From 6 April 2019