Pension professionals favour flexible and blended retirement income strategies over traditional annuities, according to polling by the Society of Pension Professionals (SPP).
The poll, conducted during an SPP webinar on innovation in DC retirement solutions, found 19 per cent of respondents would opt for a combination of flexible drawdown and an immediate annuity if choosing a guided retirement solution for their own pension.
A further 17 per cent favoured a ‘flex then Retirement-CDC’ approach, while 14 per cent opted for flexibility followed by an annuity.
The findings come as the pensions industry considers the development of default retirement income or guided retirement solutions, alongside a wider range of options including insured drawdown and Retirement -CDC.
More than 300 pension professionals attended the SPP webinar and were asked which guided retirement solution they would prefer for their own pension.
The results indicated relatively little appetite for relying solely on traditional annuitisation. Just 3 per cent selected an annuity as their preferred option, making it the second least popular choice after collective drawdown, selected by just 2 per cent.
By contrast, 13 per cent favoured managed income drawdown with a minimum income guarantee, while 11 per cent selected Retirement-CDC on its own. A further 10 per cent chose a ‘flex then deferred annuity’ approach and 9 per cent selected managed income drawdown.
Taken together, the findings indicate significant interest in solutions combining flexibility during the earlier stages of retirement with greater income security later in life.
SPP immediate past president Sophia Singleton, who chaired the event, said: “What’s particularly striking about this SPP polling is the breadth of solutions that pension professionals would choose for themselves.
“The results demonstrate a real appetite to look beyond traditional drawdown and consider how different approaches, including Retirement CDC and various flex options, could work to provide better outcomes in retirement.”