Only 25% of respondents would use most or all of their pension pot to buy an annuity when they retire, according to research by Hymans Robertson.
Its research, which surveyed 1,000 current members of defined contribution (DC) pension schemes, found that 31% of respondents would not buy an annuity, but would keep control of their money and draw an income from the pot each year.
Just over one in ten (12%) would not buy an annuity, but would take their whole pension pot as cash to spend in other ways.
Following the government’s pension reforms, announced in the Budget 2013, nearly two-thirds (61%) of respondents are confident about self-managing the money built up in their pension pots, compared to 19% who are not.
The research also found:
- 34% of respondents aged 51 and over felt annuities are not flexible enough for their retirement plans, compared to 20% of respondents aged 50 and under.
- 38% of respondents aged 51 and over labelled annuities as poor value for their savings, compared to 21% of those aged 50 and under.
Chris Noon (pictured), partner at Hymans Robertson, said: “The Chancellor’s Budget changes aren’t yet cold, but the mind-set of savers is clearly already changing.
“Greater trust and flexibility has been welcomed and annuities are set to be a product for the minority, not the masses.
“The confidence savers are showing on managing their own pots is positive. The reality is, however, that retirees are going to need tools to manage their pots over a 30-year period in retirement.
“Systems exist at present to help people build the right pot for retirement. What’s missing is the tool to help people spend at the right pace.”