Only 10% of advisers would look to purchase a pension annuity with the whole amount of their pension savings, according to Skandia in a recent survey. The research also found over half of advisers would use their entire pension savings to go directly into income withdrawal and not an annuity, while 38% would use a combination of income withdrawal and an annuity.
Their reluctance to embrace annuities for themselves has made advisers more likely to recommend income withdrawal to their clients, with 61% of advisers expecting income withdrawal business to increase over the next year. This is a good point to suggest that this is for larger pension pots.
Nearly a third of advisers surveyed felt income withdrawal is appropriate for over half of their clients, while a further half of advisers believe it suits over a quarter of their clients.
The research indicates advisers and consumers are becoming increasingly proactive in seeking to avoid the inflexibility of an annuity, Skandia says.