Tim Gosden, Head of Strategy for Legal & General’s individual annuity business

Over the last few years consumers will have undoubtedly asked themselves that question and it seems many have elected to continue to work. Could it be that the whole concept of retirement has changed, fuelled by falling annuity rates, uncertain market conditions and rising inflation? Certainly industry statistics would appear to support this, because as the chart below demonstrates, in terms of individual annuity contracts sold there was a general decline between 2009 and 2011.

However, last year there was a smallish 5% improvement in the number of annuity contracts sold, so perhaps there are some early signs of a recovery. Pension funds also recovered in 2012 with annuity new business premium of just over £14bn being up 25% on 2011 and overall average pot size at £33,000 up by 20%. Unfortunately, the same can’t be said of income drawdown sales, which at £1.2bn were slightly down on 2011 and still down on 2008 both in terms of contracts sold and new business premium.

Are more consumers shopping around?

The tendency for a large proportion of consumers to buy their annuity from their pension company without shopping around for a better deal is a...Read More