Annuity sales soar to 10-year high

Unlock the editor’s digest in free

FT editor Raula Khalaf selected his favorite stories in this weekly newsletter.

Annual sale in 2024 has risen to their highest level in a decade, as high rates and economic uncertainty lead people to products and their guaranteed income flow.

Insurance provider sold $ 7 billion in the anniversary of the last year, according to the British Insurers Association, 5 percent compared to 2021 and the highest statistics since George Osburn “.Pension freedom“Budget in 20. The number of contracts sold in the last year increased by 20 percent to 89,600, which is a quarter of 10 years-yet a quarter of the 2013 image.

“With the ongoing global turmoil and economic uncertainty, there is a growing desire for people who seek to retire,” Lorna Shah, managing director of the insurer’s legal and general retirement, said.

Sales have declined in 2014 after the then Chancellor Osburn removes chronic restrictions, which pushed most pensioners into the anniversary.

The number of contracts sold has dropped to the lowest of all time in 2021, which has dropped from about 1,5 in 20 years.

However, the resurrected interest rate, together with the long -term collapse of the number of people in the liberal defined benefit pension, has been persuaded to return to the anniversary of the savers in the last two years.

Despite the upheaval, annual purchases are creating a slight ratio of ways that people access the pension resources. They were the most popular among people with pension clocks £ 50,000 to $ 250,000.

“People think that this is a choice of an anniversary or income drown – it is none or you can include both,” Helen Moricci, the head of the leisure analysis of Hargrives Lancedown.

He said that the so -called mixed solutions could apply to someone who would like to do “to move out of work, perhaps part -time work.” Retirees “can compete in slices, take less than their pensions and use it” to secure some guaranteed income from an anniversary “. He said the rest of the investment would also have the opportunity to extend their pension watch.

Morrises explained that the anniversary for old pensioners has become increasingly attractive. Anyone who encouraged a £ 100,000 pension pot at the age of 65 he would receive an annual £ 6,309 income in a single life, with a five -year guarantee.

For this week, a person who accepted the same anniversary at the age of 75, will receive $ 9,368 per year by the “best anniversary rate” of Hargrivels Lancedown.

“If you invest in income drinks at the age of 75, you need to work very hard from an investment point of view to generate your portfolio,” Maurici said.

Long -term Savings Principles ABI chief Rob Yill mentions that more people have taken advantage of professional advice before buying an anniversary and exploring the market for the best [option]”.

The ABI said that before buying the anniversary from 20 percent in 2021, thirty percent of the buyers received financial advice. Seven of them in 10 took an anniversary from a separate supplier to him that they had retained their pension savings.

Some advisers were careful about encouraging their clients to buy the anniversary. “Once you buy it, you can’t tweet it,” said Daniel Huff, a financial planner of the RBC Bruin Dolphin. “Toplist rates are initially good, but once you make additional features they become less attractive” “

In contrast to the pension watch, the anniversary is usually not passed as inheritance. In the case of a joint-life anniversary, the husband / wife allows the husband to earn income after marriage, but the rates on the offer are much lower than the single-life anniversary.

Nevertheless, the anniversary suppliers say that beyond high interest rates – there are underlying structural changes in drawing people into products. Defined Benefit Pencils Skims – Phase -of -the -Pencils offer a guarantee income until they die – which means that the next generation’s retirement will have to manage their retirement earning more carefully, Pitt Cowel, the head of Standard Life’s anniversary.

The annual rates are driven by several factors, including long -term possibilities for the base rate. Hargrives Lancedown Morrises said that interest rates “was expected to get back next year or more, I can’t think of our mega-lol rate back [of the 2010s] Soon at any time. ”