Gross sales of annuities surged greater than a fifth in the course of the first three months of the 12 months to achieve their highest degree for eight years.
Knowledge from the Affiliation of British Insurers (ABI) confirmed that individuals purchased 16,256 annuities between January and March.
That was the most important quantity recorded since July and September 2019 when 17,252 had been offered.
Annuity premiums for the primary quarter of 2023 climbed 22% to achieve £1.2bn, the very best worth since 2015 when the pensions freedoms had been launched.
That was up from £902m within the earlier three months and £839m within the first quarter of 2022.
Yvonne Braun, ABI director of long-term financial savings coverage mentioned: “It is nice to see extra folks making the most of the safety annuities have to supply, particularly given the present beneficial charges.”
The figures had been bolstered by extra folks switching supplier. For the primary time since 2016, greater than 10,000 folks purchased an annuity from a unique supplier to their pension financial savings supplier, the open-market choice, making up 64% of gross sales and totalling £847m.
Compared, solely 55% of gross sales had been made by a unique supplier in the identical interval in 2022.
Stephen Lowe, group communications director at retirement specialist Simply Group, mentioned: “It’s encouraging to see practically two-thirds of retirees used their proper to buy round and to change away from their current pension financial savings supplier to a extra aggressive supplier of annuities, though that also reveals round a 3rd are prone to be lacking out on further revenue.”
He mentioned the hole between the highest and backside suppliers has widened to the purpose {that a} wholesome 65-year-old can safe practically 14% extra annual revenue by securing the very best as a substitute of the worst price, and doubtlessly a fair increased revenue relying on life-style elements and medical historical past.
Clients additionally look like handing over higher numbers to merchandise which defend them from inflation, the ABI mentioned: gross sales of escalating annuities, which offer an revenue that will increase yearly, grew by 23%.
Mr Lowe mentioned: “Monetary advisers may also help folks discover the very best offers by asking the suitable questions and accessing reside charges from completely different suppliers. The ABI’s figures recommend the common pension used to purchase an annuity was practically £74,000 however even far smaller quantities than this are vital and justify searching for skilled assist.
“Past discovering the very best price, advisers may also help retirees select the very best ‘form’ when it comes to a partner’s pension, loss of life advantages and inflation-protection choices which, as immediately’s figures present, turns into extra necessary at a time of sharply rising prices.”
