Unfamiliarity stops advisers recommending investment linked annuities

Of these advisers, a third cite their unfamiliarity with the product as the reason they do not advise on them.

However, the findings reveal that more than a third of those who advise on investment linked annuities have seen a rise in popularity of these products in the last 12 months. Advisers say the most common scenarios where they recommend investment linked annuities are when their clients' funds exceed £100,000 or if inflation proofing is required.

Advisers believe the most important factors when deciding which investment linked annuity product is most appropriate for their clients are; how the starting income on an investment linked annuity compares with that of a conventional annuity, and the past performance of the investment. The quality of the service provided is also a major consideration for advisers.

Michelle Cutler, LV= Head of Investment Linked Annuities said:

"People are spending longer in retirement and for those about to give up work making their retirement income go further is a key concern. Investment linked annuities allow funds to continue to participate in future growth, and are a flexible alternative to standard annuities, so it is encouraging to see a rise in client interest for these products.

"Our research shows that for some advisers their unfamiliarity with investment linked annuities means they could be missing out on an opportunity for their clients. Providers need to build greater awareness of these types of products to help advisers feel confident in their discussions with clients."