More than one in four (26 per cent) non-retirees would choose an annuity as their preferred retirement option, as demand for certainty and guaranteed income rises, according to LV.

Its research showed that 10 per cent would select drawdown and 5 per cent would choose equity release.

A further 18 per cent would opt for a combination of an annuity and drawdown, which LV said highlighted the growing demand for blended retirement income strategies.

The findings emphasised the pressure savers were feeling when it came to preparing for retirement, with just 42 per cent of non-retirees confident they will have enough saved for a comfortable retirement.

Interest in guaranteed income solutions has grown amid improved annuity rates, which reached their highest level in 18 years this summer.

LV’s research also suggested people were considering a wider range of retirement income options, as while 18 per cent preferred a lifetime annuity, 8 per cent favoured a fixed-term annuity.

Despite the rising interest in annuities, 29 per cent of non-retirees said they were unsure how they would prefer to access their retirement income.

"Higher annuity rates have brought guaranteed income solutions firmly back into focus, but consumers continue to value flexibility alongside financial security,” commented LV savings and retirement sales director, Gwen Haggo.

“Our research shows people are weighing up a range of retirement income options, reflecting the different needs and priorities they have in later life.

“With many consumers still unsure how they want to access their retirement savings, financial advice can help them understand their options and make informed decisions.

“There is no one-size-fits-all approach to retirement income, with the right option depending on the flexibility and certainty each person needs.”

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