What does the future hold for annuities?

After years of declining rates and criticism, the prospects for the annuities market look set to improve as sales volumes increase and new products come onto the market

The future and purpose of annuities has been in question since new A-Day rules have allowed people to forego the purchase of this form of retirement income. Their case has not been helped by the fact that rates have gone down and look unlikely to greatly improve unless there is a marked improvement in gilt returns, which are one of the main underlying assets that annuity providers invest in. However, things look more promising for this market than they have for some time. In particular, the Association of British Insurers (ABI) has recorded increases in sales levels while two providers hav...