Despite the widespread collapse in demand for annuities, people across the pensions industry have overwhelmingly agreed there is still a need for guaranteed income.
Some 94 per cent of professionals in the pensions industry told Equiniti’s sixth annual retirement survey there was still the underlying need for a guaranteed level of income.
In addition, 86 per cent thought pension scheme members were underestimating how long they would live in retirement.
Figures from the ABI showed the number of annuities sold in Q1 2015 continued to fall, with 20,600 annuities sold compared to 28,700 the previous quarter and 74,100 in Q1 2014.
Nigel Pearce, life and pensions director at Equiniti, said: “While the hype of the new pension freedoms has contributed to members engaging more with their pension, which is positive news, there are also concerns that people will underestimate their time in retirement and also struggle to get advice.
“There is also the overwhelming belief that pensioners will still need products that can secure guaranteed levels of income in retirement.”
Adviser view
Floyd Fombo, a chartered financial planner with Bristol-based Rathmore Financial, said: “An annuity is the simplest form of guaranteed income, but whether you need a guarantee or not depends on your individual circumstance.”
