Financial firms across the UK are reporting increased demand for products designed to fill the period between stopping work and the start of pension income.
Fixed-term annuities, a form of retirement income product, pay a regular income for a predetermined period — commonly five or 10 years — and then return an agreed lump sum when that term ends. The arrangement is intended to provide short- to medium-term income while a retiree waits for other pension arrangements to begin.
Sales of retirement annuities have risen sharply over the past couple of years, and advisers say they are seeing a fresh surge of interest in fixed-term options. Industry advisers described the product as one of the market’s "lesser-known" choices, now attracting attention from people seeking solutions for the timing gap in retirement planning.
Market participants say the product is gaining prominence as one component of retirement strategies, with firms highlighting the role it can play in managing cash flow in the early years after leaving work. Advisers and providers continue to promote awareness of the option as part of a broader suite of retirement income solutions.