The case for annuity/drawdown combinations is stronger than ever, but until the rates for lifetime annuities bounce back to levels that are considered ‘value for money’, other options may produce better outcomes.
Finally, just because a client needs an amount of guaranteed income, it does not necessarily follow that this has to be secured by a lifetime annuity. Annuities remain the only policy that can guarantee income for life and so the question becomes: when is the right time to purchase this insurance?
Billy Burrows is director of Retirement Intelligence
Key points
Pension freedom has accelerated the use of combinations of annuities and drawdown.
The term hybrid is used for a single policy that allows for a combination of annuities and drawdown from the same provider.
The case for purchasing lifetime annuities at current rates is not very strong.
