Drawdown sales volumes are continuing to increase post pensions freedoms while annuity sales volumes dropped 14 per cent in 2017, latest FCA figures show.
In its first figures for the new year, the watchdog says 30 per cent of consumers are now taking drawdown while between 10 and 15 per cent are selecting annuities for retirement.
Drawdown sales increased 11 per cent in 2017 from 2016’s figures, with 181,633 sold over the year.
Annuity sales for 2017 were 70,452, down from 82,391 in 2016.
A total 55 per cent of consumers are currently taking full cash withdrawals at the point of retirement, of which more than half are placing the assets in cash or investments within ISAs.
The regulator adds that its research suggests the overall impact of pension freedoms on the retirement income market is stabilising, however.
Figures also show growth in non-workplace pension savings are being borne out from defined benefit to defined contribution transfers.
Average single premium sales values for non-workplace pensions grew to £74,000 in 2017 while DB to DC transfers doubled in each six-month period between April 2016 and September 2017.
Aegon pensions director Steven Cameron says: “Half of over 50s want a fluid transition from work into retirement which requires greater flexibility over how and when to draw pension income, often alongside reduced earnings.”
The FCA also flagged its continuing concern over the affordability of advice for consumers with smaller pension pots.
Outgoing Financial Services Compensation Scheme chief executive Mark Neale also slammed the increase in unsuitable advice last November after the FCA announced another £69m levy to cover the FSCS’ deficit.