43% are now exploring a guaranteed income post-retirement compared to just 33% in April. Meanwhile the 54% of people who preferred flexible income has reduced to 44%, meaning the 21% gap in preference has reduced to just 1% in the space of six months. The preference for cash has remained exactly the same since April, with 13% favouring this option.
Despite the announcement that sales of annuities to pensioners have fallen by almost 90% since April, the data indicates that millennials look set to change the landscape of pensions by reverting back to guaranteed income in retirement.
The survey of over 12,000 individuals revealed that 55% of twentysomethings seek to understand just what might be provided for them in terms of a guaranteed pension income compared to just 29% of people in their sixties. Twenty-somethings are least keen on cash, but the figure more than doubles between people in their twenties (7%) to people in their sixties (16%). Both of these may be due to the fact that younger generations are far less likely to have any form of defined benefit contribution and millennials are more uncertain about future earnings in general.
More people with pension pots of over £150,000 are seeking guaranteed incomes (21%) in October than in July (17%). Three quarters (77%) of those with the most sizable pots favour flexible retirement solutions, compared to just two fifths (39%) of those with pensions savings of less than £50,000.
Women continue to be more likely to favour securing a guaranteed income (37%) than their male counterparts (33%), with men most likely to opt for flexibility (55%).
Samantha Seaton, CEO of eValue, commented:
“It is interesting to see that no matter how you slice the data, whether by gender, pot-size, or age, taking cash is the least favoured option. This is contrary to many of the predictions about what we would see following the introduction of pensions freedoms, where there was speculation around people taking lump sums to buy Lamborghinis.
“At eValue we realised people were showing a high preference for cash until they were shown the tax implications of a lump sum, at which point they changed their mind. This is a clear sign that the tax implications of a cash withdrawal need to be crystal clear when providers and advisers are discussing pension options with consumers.
“Another interesting trend is the jump in preference for guaranteed income over the last six months. I’m looking forward to seeing a number of cost-effective products making their way to market to satisfy such a clear demand.”
“Perhaps the most interesting finding from the research though is the preference that risk-averse millennials are showing for guaranteed income, making the debate around the future of the pensions income far from over.”
