Changes in income drawdown will result in annuity purchase delay, finds Skandia survey



People will Delay Annuity Purchase Because of Rule Change, Found a Skandia Survey

People will Delay Annuity Purchase Because of Rule Change, Found a Skandia Survey

More people will delay purchase of annuities because of changes to income drawdown rules, feel 80 percent of financial advisers surveyed by Skandia.

The report, published today said the new rules, which made flexible and capped income accessible from the age 55 and came into effect on April 6, have made income drawdown more investor friendly.

The survey had interviewed 1,700 financial advisers and one in five believed that income drawdown is the best option for more than half of their clients. Majority of the respondents said the current income drawdown is suitable for 10 to 30 percent of their clients and research showed that it is set to grow in future.

Income drawdown has always been popular with those who wanted to have greater control over their retirement income, said head of retirement planning at Skandia, Adrian Walker.

“The sweeping changes to drawdown rules takes this one step further, making income drawdown more flexible and more accessible than ever”, said Mr. Walker.

“With the changes in legislation around the flexibility of taking pension benefits beyond age 75 linked to the wider new income drawdown rules, we expect more people will delay their annuity purchase in favour of using income drawdown – and the data from our adviser confidence barometer supports this”, he said, adding: “With this in mind, we expect the income drawdown market to grow stronger than ever”.

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