Across the fourth quarter of last year, 21,200 annuities were sold - worth £1.1bn - compared with 19,700 drawdown policies - worth £1.4bn.
Annuity sales are now almost on par with drawdown sales since the reforms came into effect, the ABI data found.
Overall, since April 2015, £3bn has been paid out in 213,000 cash lump sum payments, with an average payment of £14,800.
A total of £2.9bn has been paid out via 835,900 income drawdown payments, with an average payment of £3,500.
For funds invested in new products since the reforms came in, £4.2bn has been invested in 63,600 income drawdown products, with an average fund of £66,000.
In total, £3.3bn has been invested in around 61,700 annuities, making the average fund invested nearly £53,000.
According to the ABI, smaller pots are generally being taken as lump sums, while larger pots are still being used to access a regular retirement income, with an average fund invested of £59,600.
Additionally, almost £7.5bn has been invested to buy nearly 125,500 regular income products; either annuities or income drawdown products.
Another key trend is people tending to use drawdown as a regular income product, with 65 per cent withdrawn in the fourth quarter being worth £1,000 or less.
The data also suggested that the amount of cash lump sum withdrawals is decreasing, as demand settles following the reforms.
Only £660m was withdrawn in cash in the fourth quarter, compared to £1.3bn and £1.2bn in the second and third quarters respectively. Over half 55 per cent of cash withdrawals were less than £10,000.
| ABI Pension Freedoms Data | Q2 2015 | Q3 2015 | Q4 2015 | Total- nine months since reforms |
| Cash withdrawals | £1.3bn paid out in cash lump sums, an average payment size of just under £15,000. | £1.2bn paid out in cash lump sums, with an average payment size of just over £15,000. | £660m paid out in cash lump sums, with average payment of just over £14,000. | £3bn paid out in just over 213,000 cash lump sum payments, an average payment of nearly £15,000. |
| Drawdown withdrawals | £1.2bn paid out via 282,000 income drawdown payments, an average payment of nearly £4,200. | £970m paid out via 324,000 income drawdown payments, an average payment of nearly £3,000. | £730m paid out via 230,000 income drawdown payments, an average payment of nearly £3,200 | £2.9bn paid out via 836,000 income drawdown payments, an average payment of £3,500. |
| Annuity sales | £990m invested in around 18,200 annuities, making the average fund invested just over £54,500. | £1.17bn invested in around 22,380 annuities, making the average fund invested just over £52,300. | £1.1bn invested in around 21,200 annuities making the average fund invested nearly £51,900 | £3.3bn invested in around 61,700 annuities, making the average fund invested nearly £53,000. |
| Drawdown sales | £1.3bn invested in 18,800 income drawdown products, an average fund size of almost £69,000. | £1.55bn invested in 25,100 income drawdown products, an average fund size of almost £61,900. | £1.35bn invested in 19,700 income drawdown products, an average fund size of almost £68,500. | £4.2bn invested in 63,600 income drawdown products, an average fund of just over £66,000. |
Source: ABI
The ABI’s director of policy for long terms savings and protection, Yvonne Braun, said following some initial pent up demand, the number of people accessing their pension pot as cash in one go has settled down.
“Annuity sales are beginning to see a revival, with more annuities than drawdown products sold in the last quarter; this shows people still really value a lifelong guaranteed income.”
John Perks, managing director of retirement solutions at LV, said it is no surprise that whilst some want more flexibility, many still want the security of a guaranteed income.
“It’s good to see the freedoms working as intended, but there are still large numbers not shopping around and this is extremely concerning.
“People who shop around at retirement are more likely to get a better deal and we hope the reforms from the Financial Advice Market Review will go some way to address this issue.”
He added that better access to advice should also help more consumers understand their options to blend multiple products together to meet their changing needs throughout retirement.
Gregg McClymont, head of retirement savings at Aberdeen asset Management, said this was yet more proof that the prophecies of people purchasing Lamborghinis have proved false.
“Most people are being sensible with their pension pots and not drawing it all in cash to spend. That’s encouraging. For most current retirees these accessible pots are a top-up to a gold-plated final salary pension income, and as such the freedoms provide welcome flexibility.”
ruth.gillbe@ft.com
