Being at the coalface, we all know that the at-retirement market is seriously flawed. But as usual, the Government has not cottoned on to just how flawed it is.
I suspect that over the next few years, at-retirement will make up increasingly more of the work of advisers. Annuities are likely to become less and less the default option for a retirement income. The rates have dropped and people are living longer so there is not much reason for annuities to ever go back up to historical figures.
This whole sector needs a complete review. We need some new products which will require some thinking outside the box by both industry specialists and the Government. Unfortunately, the industry is not interested in doing that unless it can see profits and the Government has not got a great track record on innovative thinking.
In 20 years’ time, we’ll look back at the quaint time when people worked for 40 years and retired at age 65. The landscape is changing and pensions need to keep up.