Pensions - Articles - Dip in annuity sales shows the new flexibility in retirement

 “The dip in annuity sales merely illustrates the new status-quo for flexibility in retirement. Robust annuity sales at the end of 2015 showed demand for income certainty remains high, however recent consumer behaviour indicates that people may be less willing to trade off their access to cash. When you consider that already poor-returns from traditional annuities have taken a further hit after Brexit, this in combination with the recent interest rate cut, make annuities markedly less attractive – it’s difficult to rationalise a decision that locks in your pension pot for your whole retirement with no prospect of any upside and no access to your cash.
 
 “Conversely, the research shows that the performance of unit-linked guarantees - often known as variable annuities, that provide regular income payments guaranteed not to fall, with added benefit of a rise in fund value if investments perform well - has been diametrically opposed to enhanced annuities. It’s encouraging to see retirees looking at new and more flexible options that can better suit their lifestyles today.”