Advisers are seeking alternatives instead of ‘locking clients into' low conventional annuity rates, according to research.
In a poll of 447 retirement specialist IFAs, Primetime Retirement found 82% of advisers are concerned about conventional annuity rates and turning to different products. An additional 5% are concerned but believe there no other options.
Four in five (79%) believe rates will not rise over the next year but 58% are predicting increases in the next five years.
The research also found 91% of IFAs believe the Bank of England base rate will rise over the next five years signalling growth in annuity rates.
Primetime Retirement chief executive Kim Lerche-Thomsen said: "We are currently seeing low annuity rates which are causing IFAs to search out alternative annuities but it is encouraging to see that over the next five years, rates should improve.
"We see flexibility in all other financial services sectors, so why not for retirement income products? Despite people living much longer, a person's health and family circumstances are unpredictable. Fixed term annuities allow those in retirement to determine which type of annuity suits them best in individual five to six year stages throughout the latter part of their life.
"Currently there is a serious reality gap between the incomes people believe they will have in retirement and the incomes they actually achieve. Retirement income solutions have to adapt to the new reality and current solutions will not be suitable for all."
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