Pensions product sales rose to a record high in the second quarter of 2016, continuing an upward trend by rising 6.2 per cent on the first three months of the year.
According to figures from financial intermediary Equifax Touchstone – researched from 90 per cent of the UK’s leading life and pensions companies – some £8.4billion flowed into a range of pension products across the country between April and June.
This trend comes despite recently released figures from Willis Towers Watson showing almost half of the UK population is facing a crisis of confidence when it comes to retirement planning.
Sales of self-invested personal pensions (SIPPs) were up by 7.9 per cent, equating to some £302.8m, and contributing to a rise of 14.3 per cent for the year as a whole.
Flexible drawdown investments also rocketed, with new investments and transfers up 15 per cent, or £145m, bringing the total invested to over £1billion.
By contrast, sales of personal pensions dropped 6.8 per cent and new investments in individual stakeholder pensions fell 28.6 per cent – trends that experts have attributed to more employees instead fulfilling their financial planning via auto-enrolment.
John Driscoll, director at Equifax Touchstone, said: “It’s promising to see pension investments continue to grow strongly, despite market jitters in the run up to the UK [EU] referendum.
“There does however seem to be a stark divide in terms of investor types. SIPPs, typically used by wealthier investors, are showing strong growth, while investments into personal and individual stakeholder plans fell.”
Lynn Graves, retirement expert at Scottish Widows commented: “It’s not surprising that we’re seeing more people move money into drawdown to make the most of pension freedoms.
“Our annual research shows that the proportion of people saving adequately for retirement has steadied at 56 per cent, the same as in 2015, so it’s likely that this is more about product flexibility than significant changes to saving habits.”