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The most important features of retirement products

Following the dramatic changes to pensions announced in the Budget, Partnership has commissioned research to identify what aspects of retirement products are considered most important by consumers.

More than 2,000 people aged between 45-70 were surveyed to ascertain their views.

Almost two-thirds (64%) cited guaranteed income for life as an important feature, with just under a third (31%) preferring to maximise their income, and almost a quarter (24%) opting for a product that kept pace with inflation.

Tax efficiency was next on the list (21%), with control over monthly income on 17%.

Many of these features are available as part of annuities, whether standard or enhanced (enhanced annuities can be greatly beneficial to those with health/lifestyle issues which reduce their life expectancy).

A further 15% wanted a very low risk product that could never see them run out of money, and 14% wanted to ensure that their spouse would receive some income if they themselves passed away.

In particular, guaranteed income for life (the single most popular feature) is a key part of annuities, and is not offered by any other retirement product.

Partnership’s Managing Director of Retirement Andrew Megson said that it was interesting to compare the most desirable features of retirement products with the claims made that the Budget reforms were a death knell for annuities.

Megson pointed out that many of the features people wanted most are offered by standard and enhanced annuities.

He added that many people are worried about running out of money in retirement, which is an especial concern as lots of people also underestimate their life expectancy and may end up with a longer retirement to fund than they anticipate.

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