Premature death knell
Yvonne Braun, ABI’s director for long-term savings policy, added: “While providers continue to meet high levels of demand, it’s clear that people are taking a sensible approach and considering how they will pay for their retirement.
“Despite some ringing the death knell for annuities, this seems to have been premature. An increasing number of people are recognising the value of a guaranteed income, with annuity sales rising this quarter. There are also initial signs that the number of people accessing their pension pot as cash is beginning to settle down, with larger pots continuing to be used to buy retirement income products.
“However, the figures also show that ensuring people save enough for retirement remains our key challenge. With life expectancy increasing and final salary pension provision declining, we must now turn our attention to helping customers grow bigger pots,” Braun concluded.
Instructive but quirky
Hargreaves Lansdown, however, cautioned that whilst the ABI data is instructive, it may also have a couple of quirks.
The data could include drawdown arrangements established before the pension freedoms came into effect. The ABI also does not include data from some of the UK’s largest drawdown providers, including Hargreaves Lansdown.
Data released last month from HM Revenue & Customs suggested that only £2.7bn had been withdrawn, however HMRC admitted that its data was incomplete as reporting is not yet mandatory.
