Around 53 per cent of advisers said their clients had heard of annuities but had little understanding of their features and benefits, new data from Primetime Retirement has revealed.
A further 39 per cent of advisers believe that their clients know what annuities are, but they have “numerous misconceptions”, and 20 per cent said that their clients were “often opposed to taking out the product”.
Primetime Retirement CEO and founder, Kim Lerche-Thomsen commented: “A lack of education and engagement when it comes to pensions is one of the biggest problems facing the industry. And despite continued efforts across those in government, industry experts and providers in tackling the issue, a clear knowledge gap still exists.”
Despite this, 71 per cent believe that retirees’ resources are sufficient to make an informed decision about their retirement, and only 20 per cent believe that there is not enough information available for retirees.
Additionally, 46 per cent of clients include fixed-term annuities in their financial planning, suggesting that there is a growing understanding amongst retirees.
The study also found that comfortable retirement is highly desired amongst those surveyed, with 98 per cent of advisers saying that having a guaranteed income in retirement is important to their clients.
Lerche-Thomsen added: “Advisers are clear that security of income in retirement is one of the most important factors for retirees. As such, retirees should be looking to use lifetime and fixed-term annuities as part of a blended retirement portfolio. However, many have a negative perception of these products or no knowledge at all, meaning there is a danger of these individuals sleepwalking into other options, such as drawdown.”