Pensions - Articles - Aegon comments on ABI full year data

 “Yesterday’s figures should raise a red flag for the industry and future retirees alike. Despite more than half of retirees taking a sensible approach and withdrawing less than 1% of their pot a quarter, a sub-section are at risk of exhausting their funds in the next 10 years if they continue to access funds at the current rate. Life expectancy, the state pension age, and inflation are all rising, and all will be putting pressure on those planning for a retirement income that can go the distance.

 “As annuity rates continue to fall in response to low interest rates and quantitative easing, it’s likely that annuities will fall even further out of favour. However, this doesn’t mean people have to sacrifice the security that they offer. New products, born out of the pension freedoms, keep funds invested providing exposure to potential market upside, while guaranteeing a minimum income throughout retirement, and access to cash if needed. The new retirement income market is still nascent, but is quickly finding its feet. This can only be a good thing for the two million people set to retire by 2020.”