The proportion of consumers using advisers before making a full withdrawal from their pension has fallen, latest FCA data shows.
While more than two thirds of consumers continue to use advisers for drawdown, the data shows a fall in adviser use among consumers making full withdrawals from their pension from 44 per cent between April and September 2016 to 38 per cent between October 2016 and April 2017.
69 per cent of customers going into drawdown used an adviser, the same proportion as the previous two six-month reporting periods.
The data bulletin says: “The percentage of drawdown accessed by existing customers of firms has remained relatively static. This could suggest that customers who access pots early without taking advice may be accepting drawdown from their current pension provider without shopping around.”
It adds: “Changes in this percentage could have a big impact on the total advice proportion across the sector.”
The data for full withdrawals include new and existing customers.
Just over one third (34 per cent) of customers buying annuities used an adviser in the most recent six-month period, which was unchanged from the previous six months. However, it was a drop from 40 per cent of customers in the same reporting period as last year.
The data also shows there was an 8 per cent fall in the overall number of pension pots accessed in the latest six-month period compared to the previous six months. However, there was a 9 per cent increase in the overall number of pension pots accessed compared to the same period last year.
The regulator says this was driven by a 21 per cent drop in the number of annuities bought and an 11 per cent fall in the number of full cash withdrawals from the previous six-month period.
The bulletin says more than twice as many pots are moving into drawdown than annuities.
Hargreaves Lansdown policy head Tom McPhail says: “Demand for drawdown is now outstripping annuities by almost three to one; it is clear investors have limited appetite for guaranteed incomes at today’s relatively low interest rates.”
He adds: “The worry is that for many people, at least some guaranteed income is extremely important, particularly at older ages. If this trend continues much further we may not have an annuity market at all and that won’t be good for investors.”