Individuals now have the option to leave their pension pot intact until retirement or start accessing it from age 55; secure a guaranteed income with an annuity or employ flexible income options by remaining invested; take cash out in amounts to suit personal requirements or access their whole pension savings in one go. The freedoms also allow individuals to combine options.
Unsurprisingly, as a result of the new rules, the way retirees have accessed their pensions over the past five years has changed significantly. From April 2015 to July 2020, retirees have opted for pension withdrawals totalling almost £37bn. Somewhat surprisingly, considering the guaranteed lifetime income they provide, the take-up of annuities is also on the decline, with only 11% buying an annuity in 2018/2019 – down from 13% in 2016/2017.
Yet the market is in a very different place today compared to 2015, and…
