Pension annuity sales leap by almost 40% in a year

05 November 2024

New data from the Financial Conduct Authority (FCA) shows that sales of annuities increased by 38.7% in a year. The increase has been partly fuelled by improved annuity rates, which has boosted the level of guaranteed income available when purchasing an annuity.

The data, released by the FCA on 26 September, shows an increase from 59,163 UK annuity sales in the financial year 2022/23 to 82,061 in 2023/24. The FCA say that this was the biggest increase in sales of any type of retirement income product in this period.

An increase in annuity rates isn’t the only factor contributing to the growth in annuity sales. The industry has also seen growth in the number of pension pots accessed for the first time. That increased by 19.7% in the same period, according to the FCA. This may have also contributed to the increase in annuity sales.

Reacting to the news, Rob Hillock of independent consultancy Broadstone, said: “The increase in annuity rates has fed through into a significant rise in sales through 2023/24 as pension savers rush for security and to lock in elevated rates.

“Given annuities offer peace of mind that retirees’ money will not run out during retirement, it is perhaps unsurprising that more attractive rates have led to a surge of popularity.”

This news follows earlier reports by the Association of British Insurers (ABI) that 44,983 annuities were set up in the first half of 2024, compared to 33,255 in the same period a year ago. 

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If you are considering turning your pension savings into an annuity for guaranteed retirement income, our friendly Annuity Specialists are here to help. They will explain your options and explore how much guaranteed income you could achieve from your pension fund. 

They can also tell you if you qualify for more income with an enhanced annuity on account of adverse health issues or lifestyle choices, such as smoking, which could reduce your life expectancy. 

You can speak to a member of our Annuity Guidance Team today by calling freephone 0800 652 1316 or request a call back. Alternatively, use our free annuity calculator for an instant estimate of how much annuity income you might expect to achieve.

Sources:

FCA and ABI annuity sales data: Retirement income market data 2023/24. Financial Conduct Authority. Accessed 01/10/2024.

Rob Hillock quote: Annuity sales jump amid improved rates ‘as pension savers rush for security’. Independent. Accessed 01/10/2024.