Volatile markets at the start of the year appear to be pushing savers back towards annuities nearly a year after the pension freedoms came into force.
The number of weekly annuity quotes at Aviva – the largest provider in the country – were on average 23 per cent higher in the first six seeks of 2016 than the last quarter of 2015, excluding the Christmas period.
Compared to the same period of 2015, there has been a 58 per cent rise in annuity quotes, Aviva says.
The insurer could not provide underlying figures or split quotes into advised or non-advised but says the majority of its business “continues to be advised”.
Annuity sales plummeted following the 2014 Budget when George Osborne announced radical reform that gave savers 55-and-over the power to take their whole pot as cash.
But markets have steadily fallen since April 2015 when the reforms came in, with the FTSE 100 down from a high of around 7,000 to nearer 6,000 today.
Aviva head of financial research John Lawson says: “Annuity quote volumes have increased by a large margin at the same time that we have seen significant equity market volatility. Customers always feel more comfortable buying investment products when the market is stable and rising; past sales volumes of investment products such as drawdown bear that out.
“Extra work will be needed to persuade potential drawdown customers that buying after the market fall is financially astute, but it is clear that some people just want certainty.”