Partnership sees pause in annuity applications

Mr Megson said the firm’s range of enhanced and impaired annuities will still appeal to clients who do not want to accept either “the investment or the longevity risks” that potentially come with unlimited drawdown, which was introduced in a Budget that sent shockwaves through the industry.

Dismissing predictions from Barclays’ analysts that the annuity market would shrink 90 per cent as “a lot of noise”, Mr Megson said the vast majority of clients underestimate how long they will live and would still want a form of guaranteed income for life to prevent them outliving their funds.

He said attention should now turn to how the FCA will ensure guidance is responsibly provided for clients presented with more options at retirement.

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He said: “We have had a modest number of customers ringing up to put applications on hold or cancel and advisers are asking for more information surrounding annuities to help convince customers that it is still the right thing to do.”

As well as extending its “cooling off period” for any annuity sales made since 3 March, Partnership announced that the current guarantee period for any outstanding annuity quotations offered by the firm will be extended to 11 April.

Adviser view

Chris Daems, director of London-based Principal Financial Solutions, said: “As soon as we think about a relatively large sum of money many of us think about how we’re going to spend it. The danger is that we fall into the same mental trap with our pensions.”