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Annuity market stabilises after Budget

Roughly three-quarters of annuity clients are going ahead with transactions following the dramatic shake-up of pensions and annuities announced in the Budget, according to over 55s retirement specialist Key Retirement Solutions.

Key Retirement Solutions analysed customer data and found 24% of customers cancelled annuity deals or put them on hold after the Budget, with two-fifths of those who cancelled cashing in using the new triviality rules.

However, there are indications of market stabilisation following the flurry of post-Budget activity.

Key Retirement Solutions has opined that its analysis of the figures suggests that product innovation and a simplified process to help customers during the transition are crucial.

The firm also stressed the importance of customers understanding the annuity rates they can secure now, as well as the other options that are open to them.

Key Retirement Solutions Managing Director Paul Wilson explained that whilst there was a lot of noise in the market there were still many people who both want and need the income that an annuity can provide.

Wilson emphasised that lifetime annuities still have a place, and said that clients wanted to know what was happening but were uncertain, and that there was a risk of that uncertainty developing into apathy.

Earlier this month Partnership published research which indicated that security of income was considered more important than level of income in retirement.

More than two out five (43%) of those surveyed stated that they would opt for a savings bond or other product which kept their capital safe.

Although annuities are expected to decline in terms of market share after the changes announced in the Budget, their unique advantage of offering guaranteed income for life means that many people will continue to opt for them.

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