More retirees to opt for open market annuity

Expert financial advisors are predicting that more and more retirees will be exploring the open market option when it comes to annuities, according to a recent industry survey that was featured on FTAdviser.com. This marks a significant change from the majority of people opting for an annuity from their existing pension provider and instead exploring the variety of options that are available to them.

“Over a third of the advisers surveyed by Sun Life Financial of Canada. believed fewer customers were likely to opt for an annuity from their existing pension provider over the next couple of years.

The survey of 245 financial advisers identified potential movements in the retirement market over the next couple of years.

Some 50 per cent of those surveyed believe that as more and more retirees stagger their entrance into retirement by adopting a phased approach, flexible retirement solutions will only grow in popularity.

Other movements expected include the abolition of the current default retirement age (55 per cent ranked this as likely) and an increasing uptake of the open market option (50 per cent agreed with this).

Laith Khalaf, pensions analyst at Hargreaves Lansdowne, said he was not surprised at the survey results particularly the increase in the open market optional.

He said: “Shopping around is one of the most important things a retiree can do. As things stand not enough people are doing this.”

Mark Stopard, head of marketing at Sun Life, said the research highlighted the changes which were expected to affect the retirement market within the next couple of years.

He said: “The profile and expectations of the at-retirement age group has changed drastically so it makes sense that the industry and products to help them should adapt too.

“Customers are clearly phasing into retirement and advisers are recognising this change.

“This cannot be ignored, providers need to review their offerings and assess whether or not they are suitable for the changing profile of the flexible retiree.”

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Read the full article: Retirees are shopping around for annuities