Sales of annuities have fallen by over a third between the first and second quarter of 2014, figures released this morning showed.

The latest data from the ABI is a cause for concern, according to Mark Stopard, head of product development, at Partnership, an IFP corporate member. Retirees could face getting much less than they deserve, he said.

In quarter two of this year 46,368 annuities were sold at a value of £1.79m. This was down from 74,270 sales in quarter one at a value of £2.47m, which itself was lower than the last sector of 2013 when 89,896 were sold, valued at £3.09m.
Mr Stopard said: "Although today's figures do show some positives, there is some cause for concern if you look at the marked difference between internal and external sales.
"Not only are internal sales only down by 12% (- 40% for external) but just 8% of internals sales are for enhanced annuities (59% external).
"This does seem to suggest that some providers are 'making hay while the sun shines' and a number of retirees could receive significantly less income in retirement than they deserve."

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The average pot size of an annuity is bigger, the ABI figures showed, with more people with smaller pots taking cash following the increased limits announced in the Budget.
Yvonne Braun, head of savings, retirement and social care at the ABI, said: "It suggests customers with smaller pots have immediately started to use the new freedoms to take their cash lump sum, which is something the industry has campaigned for.
"The data also shows where customers with small pots choose to annuitise they are increasingly taking enhanced annuities.
"Although it is too early to determine how customer behaviour will continue to evolve between now and when the Budget reforms come fully into effect in April 2015, there are still a significant number of savers who will want the regular income provided by an annuity.
"We would expect that many will choose to annuitise later as a result of the new measures."