90 per cent of IFA ‘annuity specialists’, believe falling annuity rates will lead to an increase in demand for alternative annuities compared to conventional annuities, new research from MGM Advantage has shown.

The findings have been revealed against a backdrop of plummeting annuity rates, with the MGM Advantage Annuity Index, which tracks the income paid on enhanced and on conventional annuities on a quarterly basis, showing that average conventional rates have fallen 6.98 per cent since June 2009.

In comparison, enhanced annuities have only fallen by 5.32 per cent over the same period.

Aston Goodey, sales and marketing director at MGM Advantage said that the trend was set to continue.

“We expect that annuity rates will continue to fall, which means that conventional annuities will become less attractive as the default retirement income option,” he said.

“This research supports our view that alternative annuities will continue to rise in popularity over the coming months and years.”

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