Rachel Reeves has faced embarrassment after numerous UK households managed to avoid inheritance tax from HMRC. Sales of annuities surged by 20 percent in 2024 to reach £7 billion, leaving the Labour Party Chancellor humiliated, reported the Birmingham Live.
Pete Cowell, head of annuities at Standard Life, part of Phoenix Group, noted that more Brits were opting to access their pensions early following changes to inheritance tax announced in October’s Budget. He said, “We anticipate demand for annuities will remain strong, particularly with changes from the October Budget bringing pensions into scope for inheritance tax from 2027. The change is likely to encourage wealthier savers to access more of their pensions and annuities are proving an attractive way of doing so.”
Stephen Lowe, group communications director at retirement specialist Just Group, highlighted that more savers were seeking financial advice when purchasing annuities. He said, “The upward trend in people taking financial advice when buying an annuity to 36 percent in 2024 compared to 29 percent the previous year is very positive, as is the higher proportion of buyers securing enhanced annuity rates paying a higher income based on health history and lifestyle factors.
“The figures released by the ABI today show consumers are increasingly heeding the message to shop around and not take the deal offered by their existing pension provider. Seven in ten, 69 percent, switched from their own pension firm to a new provider when buying their annuity in 2024, up from 64 percent the previous year.”
He added, “Guaranteed income producing assets are very much in the consideration set alongside other assets. Sales of annuities are 66 percent higher than when pension freedoms were introduced in 2015. It is great to see shopping around and switching become the norm because it means more money in people’s pockets every year for the rest of their lives.”
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