Steven Cameron, Pensions Director at Aegon said: “The FCA’s latest retirement Income statistics provide insights into market trends up until March, so effectively pre pandemic. The attractions of income drawdown continue unabated, with annuity sales showing a further small 6% decline. Unfortunately, the proportion of those taking advice on drawdown remains stubbornly low at 36%. While those with tiny pots who are fully encashing them may not need advice, the worryingly high proportion taking large withdrawals of above 8% really do need help in understanding this level of income is not sustainable for life.
“The figures also show a further dramatic fall in the number of DB to DC transfers. With the latest FCA DB transfer advice rules coming into effect on 1st October, there is a real risk we’ll see a further sharp fall in the number of advisers prepared to advise in this important market, risking demand for advice exceeding supply.”
Andrew Tully, technical director, Canada Life commented: “The pension freedoms continue to be hugely popular but with this freedom and choice comes huge personal responsibility. Five years in we continue to see a drift away from financial advice as people choose to DIY drawdown. While others choose to strip their pensions at what most professionals would argue is an unsustainable rate of income. This may be OK if it is a deliberate strategy to deplete pension pots early, or over a set period, but my concern is we could be storing up trouble for the future if this data continues to tell a similar story in the years to come.”
FCA annual update on the retirement income market
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