Commenting on the Pension Policy Institute (PPI)’s announcement on research on annuities in ‘Set for Life?’ paper, Kathryn Fleming, Partner, Hymans Robertson, says:

“Annuities are often seen as one of the least popular of the pension freedom options, so it is fantastic to be able to support this PPI research and helping to raise awareness of where they can add value. An annuity can have an important role when combined appropriately with the other pension options as part of an individual’s retirement plan. This note, rightly, explores the key role annuities will play as DC pot sizes grow, education increases and the industry considers retirement options as a sequence of decisions, instead of a “once and done” event. As an industry we are still on a journey to fully integrate the pension freedom options, ensuring that they maximise individual retirement outcomes. It is great to see the PPI point towards the “teachable moments” along this journey, between age 50 and State Pension Age, where the industry needs to raise its game.

“In our experience from sponsoring this research, it is clear that there are some immediate learnings for the industry in how to raise awareness of the range of annuities available to savers. In particular, we must do more to highlight the value that can be offered when a retiree goes through a properly supported process to receive an underwritten annuity. There are also some positive signs that some retirees are recognising the role that an annuity can provide to maximise value and provide certainty when purchased later in life.

“Recognising that different retirees will have different wants and needs to be catered for, whether that is leaving money for loved ones, providing an income for life, or even managing tax, some creative but careful thinking around the role of annuities is likely to improve outcomes.”

To view the PPI press release please see here.