Annuity comparison quotes have hit their highest levels in a decade as adviser annuity demand increased sharply, according to IPipeline.
Quotes for annuities were up 60.1% in 2023 compared to the previous year. This level also surpasses the previous demand in 2013 when quotes increased by 20.2%.
IPipeline also reported that Q3 and Q4 2023 saw the highest number of comparisons run on its portal than for any other quarters in the previous decade.
The financial services technology provider has been tracking the number of annuity comparisons produced on its portal since 2013. Its annuities portal accounts for 25% of all quotes in the retirement market.
iPipeline Paul Yates said: “Interest in annuities has been increasing steadily alongside interest rates. Now, with inflation falling and interest rates expected to follow, advisers are looking to lock in competitive rates sooner rather than later.
“Bearing in mind the complexity and shifting regulatory landscape and the options available across annuities and drawdown, proper financial planning advice is more important than ever.
“This year could well be one of huge change in the pensions and retirement sector. Reforms could unlock significant capital and providers must be ready for the swell of activity this could generate.
“We know from experience that the legacy technology in pensions and annuities is a market drag – providers need to get their systems in order as a matter of urgency or risk losing out.”
According to Yates, annuities deliver a great solution for those people wanting to secure a portion of their future income.
He added: “As people with drawdown pots age, they will increasingly look at annuities to deliver this certainty to cover their non-discretionary outgoings as a minimum. This, alongside extending life expectancy, Consumer Duty, and the Retirement Outcomes Review, will drive greater analysis and use of annuities in the UK.”
IPipeline’s Building a Better Retirement report, published in partnership with Retirement Review in November 2023, found that the average target pot among 40- to 66-year-old UK savers is £223,503.
The report also found that on average the total value of personal pension pots across all schemes is £167,891.
And nearly one-quarter of this group (23%) estimated they have less than £50,000 while 37% have no target at all.
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