Association of British Insurers: Sales of annuities have picked up despite new pension freedoms

Annuity sales rose to 22,380, worth £1.17bn, during the third quarter of 2015, the first time quarter-on-quarter sales have risen for three years, the Association of British Insurers (ABI) revealed at its Biennial Conference today.

By comparison, annuity sales for the second quarter of 2015 where 18,200, worth £990m.

Figures from the ABI also revealed that £4.7bn had been paid out during the first six months of pension freedoms.

"Despite some ringing the death knell for annuities, this seems to have been premature," said Dr Yvonne Braun, director for long terms saving policy at the ABI.

"An increasing number of people are recognising the value of a guaranteed income, with annuity sales rising this quarter. There are also initial signs that the number of people accessing their pension pot as cash is beginning to settle down, with larger pots continuing to be used to buy retirement income products."

However, industry experts are aware the pensions landscape has changed. While chairing a breakout session on pensions at the conference, Andy Masters, partner, savings and wealth, KPMG, said: "I think what has changed for good in the industry is the relationship with the consumer."

In the same session, Stuart Paton Evans, retirement propositions director, Lloyds Banking Group, said: "Retirement will be a different experience for most people post-freedoms." He also remarked that people still needed help understanding their options.

And Sharon Collard, professor of personal finance capability at the Open University and member of the FCA consumer panel, added: "Pension freedoms came in very quickly and the industry had to respond very quickly and consumers are in the same position."

Last week, HMRC revealed figures which showed that 251,000 flexible payments from pensions had been made in the last six months.