Record demand for life annuity solutions – Need for security tops potential returns

Covid-19 has certainly changed the thinking about life annuities significantly. Guaranteed products fell from grace during the time of positive returns, with living annuities making up the bulk of sales. The strong market decline, coupled with uncertainty and the lowering of the repo rate, led to some serious concerns for investors. Now is not a bad time to reconsider the peace of mind provided by guaranteed products until, and if, sanity returns to the markets.

Record demand for life annuity solutions amid the COVID-19 pandemic highlights the resilience of the advisory market, according to retirement income specialist, Just.

CEO Deane Moore believes that soaring sales demonstrate advisers’ ability to successfully reinvent themselves and connect with pensioners despite an isolated working environment, ensuring that they have access to a secure and sustainable retirement income for life. “The growth in annuity sales demonstrates that advisers are in tune with their clients’ need for peace of mind, and a sustainable retirement income in these volatile and uncertain times.”

Amid the market instability brought on by COVID-19, Just has reported record demand for life annuity solutions from South African pensioners looking to lock in an income for life. Sales for life annuities have doubled relative to 2019 since the COVID-19 market crash in mid-March 2020. Moore attributes this growth to attractive annuity rates and pensioners seeking to de-risk their retirement income in an unpredictable financial climate.

An added benefit is of course that it removes the concern that clients may increase their draw-downs to unacceptable levels, eating into their retirement capital.

Click here to download the Just media release.

There has also been a call from Cosatu on the government to amend the laws governing retirement funds to allow members access to their retirement savings during the pandemic. Click here to read.