“Almost 10 years on from the announcement of pension ‘freedom and choice’, advisers and their clients have provided a big thumbs up for annuities which are delivering strong value for money to savers wanting the security of a guaranteed income for life. In the final quarter of the year, the overall value of annuities purchased rose to £1.54 billion, a 70% rise on the same quarter of 2022. But what really stands out is the trend towards retirees shopping around for the best deal.
“In the final quarter of 2023, £75 of every £100 of pension savings used to purchase a guaranteed income for life, was invested by retirees who shopped around and chose to purchase their annuity from a different company to the one they used to build up their pension pot. This is a transformation in consumer behaviour, driven in part by a positive intervention by the Financial Conduct Authority to improve competition which has delivered better outcomes for customers. Well-designed regulation can make a difference.
“Advisers led the revolution many years ago by using technology to shop around the market to ensure their clients secured the best guaranteed income for life. Advisers recognised asking questions about their clients medical conditions and lifestyle was the real breakthrough to secure the very best deals. The rest of the market is beginning to catch-up.”
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