Pensions - Articles - Partnership comments on the 'At Retirement Report' by IRESS

 “IRESS data suggests that while the overall demand for annuities has grown by 32% to the end of June (since March) the proportion relating to enhanced annuities illustrations has fallen back to 17% [Q4 2014 – 17%]. The overall effect of significant growth in illustrations and a smaller decline in the proportion relating to enhanced annuities implies that enhanced annuity illustrations have taken a modest fall. 

  

 “The relationship between illustrations and future sales is complex with factors like multiple illustration requests per customer and conversion from illustration to sale influencing the overall level of sales. Many people requesting annuity illustrations will be planning decisions months and often years in advance. Some will be obtaining illustrations solely for the purpose of advising on income drawdown. For these reasons we believe it is too early to be able to draw conclusions from illustration data during this period of change. Once the freedom and choice changes have bedded in and customer behaviour has stabilised, we expect illustration data to return to being a more useful indicator.

  

 “Enhanced annuities remain an important part of the adviser tool kit. Indeed, for an average sized pot [£69,120] a smoker could secure an annual income 7% higher than an income of a non-smoker [£3,680]. Not only do people need to shop around to get the best deal but they need to ensure that if they are eligible for an enhanced product, they choose the best in show! There are 139 basis points between the best and worst products for smokers so speaking to an adviser who can provide independent financial advice is vital.”