Interest in annuities is continuing to increase among advisers, according to financial services technology provider iPipeline.
Despite a gloomy outlook in the overall economy, the company said demand for annuities in the first six months of 2023 is still up.
In its report, it found that quotes for annuities were up 65.4 per cent - the highest level since 2014.
The firm compared the number of quotes for annuities that were run by brokers on its annuity portal from January through June in 2023 and contrasted it to the same period in 2022.
Paul Yates, product strategy director at iPipeline, said: “As interest rates have continued to rise, so has the interest in annuities.
“We have continued to see an uptick in clients quoted for annuities by advisers, and the current levels of annuity quotes are at their highest levels since at least 2014.”
Yates explained that along with rising interest rates, the continued gloomy outlook for the economy may be impacting people’s approach to risk.
“As clients gravitate to being increasingly more conservative in their risk appetite -- especially those who are older -- annuities can become a more relevant choice,” he said.
As the demand for annuities continues, it adds increased pressure on providers who may be already struggling to meet service standards using legacy technology, he explained.
“The underlying root cause of such struggles lies in legacy technology,” Yates added.
“With an increase in annuities, this issue is being spotlighted, and we expect to see more organisations embark on digitisation programmes.”
sonia.rach@ft.com
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