UK annuity providers must be ready to capitalise on a potential "swell of activity", a senior strategy director has claimed.
Speaking as iPipeline reported that annuity comparison quotes from UK advisers have hit the highest levels in a decade, Paul Yates, product strategy director, urged companies to "be ready".
Yates said: "This year could well be one of huge change in the pensions and retirement sector. Reforms could unlock significant capital and providers must be ready for the swell of activity this could generate."
But he warned that legacy technology and poor processes would hinder providers from offering the best possible solution to advised clients.
He said: "We know from experience that the legacy technology in pensions and annuities is a market drag - providers need to get their systems in order as a matter of urgency or risk losing out.”
Yates made the comments after the life insurance and pensions technology provider iPipeline recorded a more than 60 per cent increase in adviser annuity comparisons on its portal last year than in 2022.
FT Adviser can reveal that quotes for annuities were up 60.1 per cent in 2023 compared to the previous year.
This level also surpassed a previous high for demand, which occurred in 2013 when quotes increased by 20.2 per cent.
According to iPipeline, Q3 and Q4 2023 saw the highest number of comparisons run on its portal than for any other quarters in the previous decade.
Yates added: “Interest in annuities has been increasing steadily alongside interest rates. Now, with inflation falling and interest rates expected to follow, advisers are looking to lock in competitive rates sooner rather than later.
"Bearing in mind the complexity and shifting regulatory landscape and the options available across annuities and drawdown, proper financial planning advice is more important than ever.”
He said signposting to financial advice was more important now than ever, especially amid the ongoing regulatory work on retirement outcomes and the growing realisation among Britons that they need help reaching their financial goals in retirement.
Adviser view
This was echoed by Kate Shaw, director at Financial Life Planning, who said: “The pensions landscape is already complex and, with new regulations, a possible change in government coming and uncertainty around interest rates this year, it will make the need for financial planning more important than ever."
She agreed with Yates that annuities were playing an important role in retirement planning again after having a low profile for years - but added: "How and when to use them is a question that should go through an adviser to assess on a case-by-case basis."
