Two thirds of advisers are worried that clients who want lifetime guaranteed income do not have enough choice.
With 40 per cent of consumers fearing the decline in annuity rates and withdrawal of providers from the market will continue, a report by MetLife suggests that a lack of guaranteed income choices is leading to people taking more risks in retirement.
More than half of advisers said the guaranteed income market should be reviewed by the government, as a significant number (57 per cent) of consumers polled said they thought low long-term interest rates would make retirement saving more difficult.
On the back of the results, MetLife is calling for the Government’s new guidance body – which will launch after April 2018 and combine the responsibilities of Pension Wise, The Money Advice Service and The Pensions Advisory Service – to take guaranteed drawdown options into account.
The MetLife report, entitled Guaranteeing Real Pension Freedom, says: “We are calling for the new guidance framework to include a more accurate reflection of the retirement income options available, including the recognition of guaranteed drawdown as an equal option alongside annuities and drawdown.”
MetLife wealth management director Simon Massey adds: “We believe retirement conversations need to change to include a wider range of options – anything that encourages this, including guarantees and guaranteed drawdown to form part of the new guidance framework, should be supported across the board.”