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The effect of the reforms to compulsion on annuity demand

Published online by Cambridge University Press:  01 January 2020

Edmund Cannon ,
Ian Tonks  and
Rob Yuille
Edmund Cannon*
Affiliation:
University of Bristol
Ian Tonks*
Affiliation:
University of Bath
Rob Yuille*
Affiliation:
Association of British Insurers
*
e-mail: edmund.cannon@bristol.ac.uk
e-mail: I.Tonks@bath.ac.uk
e-mail: Rob.Yuille@abi.org.uk
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Abstract

This paper investigates the effect of recent regulatory changes to the compulsory annuitisation of tax-privileged pension savings, on the demand for annuities and other retirement products. We find that the demand for annuities has fallen by almost 75 per cent from its peak in 2012, and the demand for income drawdown products has increased. There is some evidence that people at younger ages and with smaller pension pots are choosing not to annuitise, and hence the average size of an annuity purchase has increased.

Keywords

insurance marketsannuitiesdrawdownG22D4D82
Type
Research Articles
Information
National Institute Economic Review , Volume 237 , August 2016 , pp. R47 - R54
Copyright
Copyright © 2016 National Institute of Economic and Social Research

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Footnotes

This article was presented at the NIESR conference on pension reform, December 2015. The views expressed in this paper are those of the authors, and not necessarily those of the ABI.

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