PENSIONS PIT

Annuity sales have slumped again with retired people showing shrinking appetites for the policies which offer a guaranteed income for life.

Policies sold by insurance companies fell by 21% in the six months to April compared to the previous six months – a trend which began with the pension freedoms introduced in 2015.

They allowed people over 55 to cash in their pension pot rather than having to use it to buy an annuity.

With annuity rates at record lows, many people are choosing to cash in and use the money elsewhere.

“If this trend continues much further we may not have an annuity market at all and that won’t be good for investors,” warned Tom McPhail of Hargreaves Lansdown.