Falling annuities sales have not translated into a drawdown boom, the latest Association of British Insurers’ figures show.
Despite the number of new annuity policies written falling 38 per cent from 28,700 to 20,600 over the first three months of the year, drawdown sales were flat.
The number of drawdown contracts sold was roughly unchanged in the run-up to the pensions freedoms compared to the end of 2014.
Around 11,500 contracts were entered into in the first quarter of 2015, only slightly more than in the final three months of last year.
However, year-on-year sales are up 64 per cent, from 6,700 in the same period of 2014.
But more drawdown customers are buying off their existing provider, with 42 per cent of sales being internal in Q1, compared to 40 per cent in Q4 2014.
Annuities sales are down 72 per cent, from 74,100 in the first quarter of 2014.
ABI retirement policy manager Rob Yuille says: “These figures show the impact that pension flexibility had even before the full reforms came into force in April.
“The product choices being made on the eve of the changes reflect a changing market but also a diverse set of needs and preferences. This is a good reminder that people need guidance or advice to help them find the right retirement product for their circumstances.”