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Demand for income drawdown accelerates in light of pension reforms

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Selectapension has seen a 174 per cent increase in the number of Drawdown cases being analysed by Advisers in the three month period following the pension freedoms, compared to the same period a year ago. 

This sustained growth follows the initial increase of 57 per cent in the number of Drawdown cases being analysed by Advisers in the first week following the pension reforms.
 
However, this growth in the number of Income Drawdown cases is not equally split across male and female clients. In particular, the data indicates that men are the key drivers in the rapid increase in the number of cases proactively reviewed. There has been a 178 per cent increase of men over 55 cases using Income Drawdown compared to a year ago. The research found that the amount of women over 55 cases using Income Drawdown as their preferred retirement income route has also increased, albeit by a slower 155 per cent compared to last year.
 
However, as a result of stronger growth among male activity, female activity now represents 17 per cent of cases, down from 18 per cent a year ago. This trend highlights that there is an opportunity for Advisers to use the changes as catalyst to engage with women, and demonstrate the benefits of professional advice. 
 
Andy McCabe, Managing Director at Selectapension, says: “The retirement market has undergone a momentous change, and retirees have shifted their focus from annuities to Drawdown. This isn’t just a flash in the pan. The early surge in the number of people  considering Income Drawdown has been sustained following April’s changes and we expect this to continue in the long-term.
 
“There is clearly still more work to be done to close the gap between men and women. Advisers need to take this opportunity to work with more female clients, especially as the population of women with private pension pots grows. They should use this period to demonstrate the value they can add to a client’s long-term financial plans.”
 

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