Retirees underestimating their life span explains the lack of annuity sales since the pension freedoms, says the Institute for Fiscal Studies.
Research from the body has found people are “systematically misjudging” how long they will live after finishing work.
Only 12 per cent of newly-accessed defined contribution pension pots are now used to buy an annuity despite their enduring popularity as a sustainable income option.IFS research economist David Sturrock says product providers should note this ignorance among retirees means many are missing opportunities to plan effectively.“If people underestimate their survival chances, they may under-value the guaranteed income provided by an annuity.”“Policymakers […]
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