Three out of four going ahead with annuities

The managing director of Key Retirement Solutions said: “While there is a lot of noise in the market, there is still a nucleus of clients who want and need the outcome that an annuity can provide.

His comments contradict more fatalistic predictions – professional services firm PriceWaterhouse Coopers said after the Budget it expected annuity sales to plummet by 74 per cent.

But Mr Wilson said that post-Budget figures suggested a rise in annuity activity, with 40 per cent of transactions conducted in the last two weeks of April.

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He said 24 per cent of clients cancelled or put on hold annuity deals, with only two-fifths cashing in under the new triviality rules. A third of clients are waiting until April 2015 for the new rules to take effect.

Adviser view

Paul Clough, director of Tyne and Wear-based Grainger Financial Planning, said: “If annuities are not right for clients now, they won’t be right in future. A lot of clients are shying away from annuities because they don’t want to do something long term. We don’t know what will happen with them, but many clients are going for a one-year, fixed-term option, and there is still a market for impaired annuities, so all options need to be explored.”