Annuity sales have continued to decline sharply 2 years after pension freedoms were introduced, according to the Financial Conduct Authority (FCA).
Figures from city regulator show 33,561 annuities were purchased between October 2016 and March 2017 – 21% lower than the previous six months (42,371).
Over-55s are permitted to withdraw 25% of their pension pot as a tax-free lump sum, under the pension freedom rules introduced in 2015.
This has resulted to annuity sales falling by 16% in the 6 months to April 2017, to their lowest level since the freedoms were brought in.
Customers aged between 55 and 64 took out 4,411 fewer annuities between April and September, while those in the 65-74 age bracket took out 4,208 annuities over the same period.
The FCA also said there have been falls in the number of annuities purchased across almost all pot sizes, except for those with retirement savings of more than £250,000.
However, there was a particularly large fall among smaller pot sizes worth between £10,000 and £29,000.
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