Annuities Crash With Poor Sales Ratings
Pensioners, with April’s new pension rules, are not annuity-oriented with their pension pot spending. The new pension rules spelled doom for plenty of annuity providers with a measly 11,000 annuities.
The City watchdog’s acting Chief Tracey McDermott said that in 2015, only 11,000 annuities were bought. The number was pale in comparison to the 89,000 sold in 2013.
The regulator noted a visible 88 per cent drop from 2013 to 2015.
Poor Pension Forecast On Rules
The new pension freedoms attracted pensioners as 2008 taught companies and retirees a huge lesson on financial management. The market’s failure signified a poor pension forecast for those who bought annuities.
Many pensioners became poor with annual payouts decreasing as interest rates fell in 2008’s financial crisis. Other pensioners dislike the annuity offered by pension providers at the time.
Plenty of pensioner providers had sales fall from 50-60 per cent. Those with other financial products unrelated to retirement and annuities fared better.
Possible Future Problems
Pension providers feel the pressure the new pension freedoms impose. It may be a good thing, according to analysts.
believes the new pension freedoms pushes pension providers to create innovative and attractive pension and annuity packages for their customers now and in the future.
A Pension FAQ on annuities can help, according to them.