New research from Primetime Retirement, has revealed that 53% of advisers surveyed say their clients have heard of annuities, but have little knowledge of their features and benefits.
A further 39% of advisers believe that their clients know what annuities are, but that they have numerous misconceptions, whilst 20% said their clients were often opposed to taking out the product.
However, despite this lack of knowledge among consumers, 71% of advisers believe that there are enough resources available for retirees to make an informed decision about their retirement, with only one in five saying that there is insufficient information available for retirees.
Primetime Retirement says its research “clearly highlights” how much more needs to be done to improve awareness of the resources available for consumers when making important financial decisions in retirement, to help dispel any myths associated with annuities, and also to strengthen consumers’ understanding of all the options available to meet their retirement needs.
The firm says the fact that 46% of all clients include fixed-term annuities in their financial planning shows that there is a growing understanding of the benefits of these products. However, the research also suggested that fixed-term annuities should play an even greater role in clients’ retirement plans, since 98% of advisers say that having a guaranteed income in retirement is important to their clients.
Kim Lerche-Thomsen, CEO and founder of Primetime Retirement, said: “A lack of education and engagement when it comes to pensions is one of the biggest problems facing the industry. And despite continued efforts across those in government, industry experts and providers in tackling the issue, a clear knowledge gap still exists.
“Even though the majority of advisers believe there are a plethora of resources available for retirees to make informed decisions, a lack of understanding among consumers remains the issue.
“Advisers are clear that security of income in retirement is one of the most important factors for retirees. As such, retirees should be looking to use lifetime and fixed-term annuities as part of a blended retirement portfolio.
“However, many have a negative perception of these products or no knowledge at all, meaning there is a danger of these individuals sleepwalking into other options, such as drawdown. Advisers can play a huge role in raising awareness of the features and benefits of annuities among their clients and ensuring they find the best retirement solution to meet their needs. At Primetime Retirement, we are committed to supporting advisers in this capacity to ensure better customer outcomes.”