Pension annuity comparison quotes continue to hit new highs in 2024, says iPipeline

In the first six months of 2024, quotes for annuities were up 12%, compared to the same period in the previous year.
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After witnessing a record 60% year-over-year increase in adviser annuity comparisons on its portal in 2023, pensions technology provider iPipeline revealed another record high in demand for annuities among advisers in the first half of 2024.

In the first six months of 2024, quotes for annuities were up 12%, compared to the same period in the previous year.

This was the highest first half since 2013, when iPipeline began tracking the number of annuity comparisons run on its portal.

iPipeline’s annuities portal accounts for 25% of all quotes in the UK retirement market.

Greg Neall, chartered financial planner at Wake up your Wealth, said: “This clearly shows a continued return to the annuity market by advisers, which comes as no surprise as annuity rates for those in their mid to late sixties are comparable to sustainable drawdown rates.

“If this higher interest rate environment persists, I believe the rates of annuity quotes will continue to increase particularly for those investors over 70 who have deferred taking their pension pots or have used a drawdown to transition towards a secure income later.”

Paul Yates, product strategy Director at iPipeline, said: “We’ve seen advisers are searching for annuities during a time of higher interest rates.

“We assume, that now rates have started to fall and may continue to do so, these annuity numbers will start to slowly reduce. It will be interesting to see what happens in the second half of the year (especially with the current market volatility levels).

“We are unlikely to see a return to interest rates under 1% again, so annuities should remain a key part of an adviser’s retirement toolkit, especially for older retirees who need income guarantees.

“We would also expect to see growth as the number of people with drawdown pots increases and as the age profile of holders grows.

“At the same time, we have a new government which could start to make major changes, and that may impact the way we save for, and spend in, retirement.”

In the Building a Better Retirement report, a publication launched by iPipeline in conjunction with Retirement Review in November 2023, data showed that among 40 to 66-year-old savers in the UK, the average target pot was £223,503, while the average total value of personal pension pots across all schemes is £167,891.

However, nearly one-quarter (23%) estimated they have less than £50,000, while 37% have no target at all. These figures show the importance of exploring the most advantageous way to access pension pots.

Zarah Choudhary

Zarah Choudhary is a Reporter for Workplace Journal and The Intermediary

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