Our 2014 white paper ‘The High Cost of Freedom: Retirement in 2020’ discussed the momentous changes announced in that year’s Budget. In it, we predicted how the pensions industry would respond.
It’s been a period of huge disruption, and it’s never been a more exciting time to work in pensions. Nearly two years after launch, there’s no evidence the new freedoms resulted in more sales of fast cars or irresponsible spending. Annuity sales volumes, having fallen by nearly two thirds after the 2014 Budget, fell by a further 40%. ABI data suggest the ‘at retirement’ market is split roughly in thirds between annuities, new drawdown contracts and cash withdrawals. It is too soon to say if this is the ‘new normal’, but it’s still higher than the 20% forecast by Towers Watson at the time.
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