The Effect Of The Reforms To Compulsion On Annuity Demand

| Publication date: 3 Aug 2016 | Theme: Macroeconomics | External Author(s): Cannon, E; Tonks, I; Yuille, R | JEL Classification: G22, D4, D82 | Journal: National Institute Economic Review Issue 237 | Publisher: Sage Publications, London

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.

Keyword tags: 
insurance markets
annuities
drawdown

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