In the current market, just one in 10 financial advisers say they would use their own retirement fund to buy a conventional or enhanced lifetime annuity, according to new research by MetLife.
Uncertainty surrounding future gilt yields and annuity rates (which remain at near historic lows) means the majority of advisers would steer clear of putting their pension pots into lifetime annuities, with just 10% saying they would invest entirely in a conventional or enhanced annuity.
Around 16% say they would delay making a decision in current conditions with 21% preferring use a mix of drawdown, unit-linked guarantees and fixed-term annuities.
Drawdown remains the most popular retirement income solution for financial advisers, who are also reporting rising interest in alternatives to annuities – the nationwide survey found that 42% of advisers’ clients are inquiring about other retirement income solutions.
MetLife UK’s managing director, Dominic Grinstead, comments: “There is strong demand and growing interest in alternatives to conventional annuities and innovation is crucial in driving expansion in the retirement income solutions market.”