Tim Banks, managing director of the pension strategy group at AllianceBernstein, argues that the presumption that individuals will retire on a specific day and immediately annuitise
on retirement, will become a redundant concept.
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.
Martin Bird continued, If there is a message which I can never stress enough, its that individual pension schemes - whatever their size or ultimate goal, or whether their aim it is to annuitise
externally or to be self-sufficient - should get their house in order so they are ready to capture derisking opportunities when they arise.
While the above reasons are some of the most common reasons why retirees may decide to annuitise
, the fact is that everyone's circumstances are unique to them.
This means allowing more flexibility and suspending the requirement to annuitise
accrued pensions at the age of 75.
This effect would presumably unwind some of the disincentive to annuitise
associated with the dis-connect between the income profile generated by standard annuities, and that desired under self-financing.