Nearly one in two people prioritise guaranteed income from their pension in retirement over flexibility, says Just Group.
A survey of 40-75 year olds with a defined contribution pension showed 46% consider guaranteed income to be the most important thing they want their pension to provide. This is substantially higher amongst both the youngest pre-retirees, with 58% of those aged 40-44 citing it, as well as 51% of those aged 70-75.
Just Group said among those aged 40-75, 7% want flexible income up to a certain age and guaranteed income after that point.
Only a fifth (20%) of respondents said that flexible income was the most important factor and 11% said they were primarily looking to their DC pension to provide a bridge until they reach State Pension age.
Stephen Lowe, group communications director at Just Group, said: “In a volatile and turbulent world, this data highlights a strong appetite for financial certainty and peace of mind in retirement.
“Younger savers seem to be particularly attracted to guaranteed income, challenging the assumption that flexible access to pension cash through drawdown is the preferred route.”
Lowe said the rise in annuity rates has increased demand for guaranteed income but the introduction of innovative products that blend drawdown and annuity is also increasing interest. In 2024, £7 billion of annuities were purchased, an increase of 34% compared to 2023.
“This allows people to rest easy knowing that they have sufficient income to cover their essentials and can still invest their remaining capital for growth if they choose. There has never been a better time to explore guaranteed income for life given the strong rates available. More people are choosing to shop around and a competitive market is providing an increasing range of tailored solutions,” Lowe added.
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