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Drawdown is favoured strategy for IFAs’ funds

Over half of IFAs intend to go into income withdrawal with their entire pension savings, according to Skandia research.

The survey of 517 advisers shows that only 10 per cent of advisers would look to buy an annuity with all their pension savings while 38 per cent would use a combination of income withdrawal and an annuity.

Sixty-one per cent of advisers expect drawdown business to increase over the next year. Thirty per cent believe income withdrawal is suitable for more than half their clients while a further 50 per cent believe it is suitable for at least a quarter of clients.

Head of pension and bond marketing Nick Bladen says: “The market has responded to concerns over the inflexible nature of annuities by looking to other retirement solutions.”

Chessman & Partners IFA Diane Needham says: “We are getting more enquiries about drawdown but we are not necessarily recommending it to more clients.

“I generally would not recommend it unless they have a fund of over £150,000 and an alternative income source.”

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