The number of IFAs who will consider drawdown for clients with pots of under £50,000 continues to grow, according to Cicero Group’s annual adviser study.
This year the research finds over three-quarters or 78 per cent of advisers would consider drawdown for those with pots under £50,000, higher than the 69 per cent in 2015.
Similarly IFAs are more likely to be using drawdown solutions than any of other solutions in the market and 72 per cent of them say there is a need for a more centralised retirement income planning process.
This is due to most advisers usually managing money for longer due to both greater numbers selecting drawdown and continued management of money post-death, alongside the increasing complexities of decumulation.
Yet, four years on from the introduction of pensions freedoms 39 per cent of advisers accept they still need to implement changes to their processes.
The use of annuities is generally expected to increase after the initial drop in the use of them when the pension freedoms first took hold.
That is even the case with conventional annuities, despite advisers generally perceiving these to be of poor value.
Cicero’s report says: “We are now seeing the realisation that annuities will continue to play a part (even an increasing part) in the average income strategy pay out. This is not to say that everything is rosy in the annuities space. Clearly it is not.
“Rates are still particularly low and advisers can view them as poor value but necessary in most cases.”