Published on 7 January, the report showed that 34% of the 200 financial advisers polled in October 2014 predicted that risk-managed funds will usurp the traditional annuity as the market forerunner by 2025.
Just 2% of advisers believe that annuities will remain the most the popular strategy, with 28% viewing flexible guarantees as most likely to become the prevailing choice for providers, advisers and consumers.
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However, Aegon’s Retirement Readiness Report revealed in November 2014 that 40% of 4,062 UK residents surveyed are looking for a guaranteed income stream in their post-work years. Another 30% said they would choose a combination of guaranteed income and a cash lump sum.
The study concluded that just 6% of those polled are on track for their desired retirement income, down from 7% recorded in the initial fieldwork in February 2014 prior to the annuities changes announced by George Osborne the following month.
Aegon investment director Nick Dixon said: “Advisers are ideally placed to understand the changing needs of the investor, and it’s clear that most now think some form of income drawdown or phased retirement will overtake traditional annuities before long.
“Flexible guarantees, risk-managed funds, and income funds are all becoming central to advisers’ toolkits as their clients look to take advantage of the new flexibilities, and with this greater flexibility the onus is now on providers to present the investment strategies that reflect this shifting landscape.”
