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ABI retirement income statistics Q3 2014

  • The retirement income market is changing, with drawdown sales at their highest level and annuity sales continuing to fall; but the overall volumes have fallen as more savers are waiting to make a decision.
  • The number of drawdown contracts sold by ABI members has more than doubled compared to Q3 2013, with a reduced average pot size, demonstrating that drawdown is opening to a wider market. The value of drawdown contracts sold by ABI members is around 50% that of the value of annuity sales, compared to 14% a year ago.
  • The number of annuities sold fell by 14% on the last quarter, and by 56% compared to Q3 2013. The number of annuities sold has fallen further than the value of those annuities, suggesting that more people with smaller pension pots are deferring or taking cash.
  • While external annuity sales have fallen, internal annuity sales have remained at similar levels. This is likely to reflect people with guarantees continuing to take advantage of them, and means that there are now a greater proportion of internal annuities (65%) and a smaller proportion of annuities are enhanced (22%).

Rob Yuille, Policy Adviser, ABI comments:

"Pension flexibility continues to have an impact on customer behaviour in the retirement market, and it is clear that there are many people waiting to make a decision about what to do with their pension. We are seeking to explore beyond the statistics with members to identify and explain the trends in customer behaviour in this transitional year."

Q3 2014 statistics

Overall annuity sales

Period Number of annuities sold % change (Year on year) Value of annuities sold, £m % change (Year on year) Average pot size (£) % change (Year on year)
Q3 2014 40,085 -56% £1,466 -50% £36,600 13%
Q2 2014 46,368 -48% £1,792 -42% £38,600 12%
Q3 2013 90,414   £2,922   £32,300  
Q2 2013 89,896   £3,098   £34,500  


Income drawdown

Period Number of new contracts % change (Year on year) Value of new contracts, £m % change (Year on year) Average pot size (£) % change (Year on year)
Q3 2014 12,212 123% £770 68% £63,100 -24%
Q2 2014 9,498 73% £669 57% £70,400 -9%
Q3 2013 5,480   £457   £83,400  
Q2 2013 5,476   £425   £77,600  


Internal, external and enhanced annuities

Period Internal annuities sold (%) External annuities sold (%) Enhanced annuities, as a % of all annuities
Q3 2014 65% 35% 22%
Q2 2014 55% 45% 29%
Q3 2013 51% 49% 28%
Q2 2013 49% 51% 25%


All data includes Legal & General and Old Mutual

Last updated 01/07/2016