You are here: Home - Retirement - Retiring now - News -

Annuities far from dead as retirees prioritise guaranteed income 

Written by:
A guaranteed retirement income is still number one priority for the over 50s, despite April’s pension reforms being heralded as the final nail in the coffin for annuities.

According to a survey by pension provider Retirement Advantage, certainty ranked as the top priority for 43% of over 50s when thinking about income in retirement, followed closely by flexibility (33%).

Being able to grow income or having instant access to funds ranked far lower as priorities, with only 10% and 14% respectively saying these were their top priority.

Annuities are the only product available on the market for retirees looking for a guaranteed income for the rest of their lives.

The products came under intense scrutiny after a Financial Conduct Authority (FCA) investigation revealed that many pensioners were picking the wrong annuity plan and falling to shop around for the best deal.

The introduction of the pension freedom rules, which allow people age 55 and over to access their entire pension pot as a cash lump sum, was widely expected to mark the beginning of the end for annuities.

However, the Retirement Advantage study suggests the products remain a viable option for many retirees.

“We asked people straight out what they would value most from their retirement savings, and certainty is their top priority,” said Andrew Tully, pensions technical director at Retirement Advantage.

“While the reforms put a lot more options on the menu for retirees, guaranteed income is still the most popular dish. Flexibility and freedom of choice are important, but certainty is still what most people want most of the time.”

The research, carried out by YouGov, also found that the over 50s are anticipating a 17-year retirement, expecting to retire at 65 and live to 82.

The most important aspects for retirement finance are the ability to pay bills (67%), go on holidays (60%), start new hobbies (38%) and pay for long term care requirements (24%).

Tully added: “It’s difficult enough to plan for a year in the future, let alone plan effectively on day one for potentially decades of retirement. People want to know they will be able to cover life’s essentials and still have the flexibility to enjoy life and deal with the unexpected.”

More on this topic: Why buying an annuity when you retire might still be the best option


There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

PayPal closing down Money Pools

The ability to create new Money Pools will be disabled from 30 September, while existing Money Pools will be s...
PayPal closing down Money Pools

How salary sacrifice can reduce student loan repayments

With the introduction of Auto Enrolment, more and more employers are opting to use ‘salary sacrifice’ as a mea...
How salary sacrifice can reduce student loan repayments

130 million old £1 coins still out there: what to do if you have one

An estimated 131 million old round £1 coins have yet to be returned to the Royal Mint, nearly three years afte...
130 million old £1 coins still out there: what to do if you have one

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week