The majority of people approaching or in retirement prefer to secure a guaranteed income from their defined contribution (DC) pension, analysis of data from the Department for Work and Pensions (DWP) has revealed.

The survey of 40- to 75-year-olds with a DC pension revealed that nearly half (46 per cent) considered a guaranteed income to be the most important thing they wanted their pension to provide.

The analysis from Just Group revealed that this was "substantially" higher among both the youngest pre-retirees (58 per cent of those aged 40-44 and 50 per cent of those aged 45-49) and the oldest (51 per cent of those aged 70-75).

Indeed, among 40-75 year olds with DC pensions, just 7 per cent wanted flexible income up to a certain age and guaranteed income after that point, illustrating that the majority of adults valued guaranteed income.

Meanwhile, a fifth (20 per cent) of all respondents said that flexible income was the most important factor, while 11 per cent said they were primarily looking to their DC pension to provide 'a bridge' until they reached state pension age.

The findings follow a record year for annuity sales, as 2024 recorded the highest demand for guaranteed income for life solutions since the introduction of pension freedoms.

Just Group communications director, Stephen Lowe, said that in a volatile and turbulent world, the data highlighted a "strong appetite" for financial certainty and peace of mind in retirement.

“Younger savers seem to be particularly attracted to guaranteed income, challenging the assumption that flexible access to pension cash through drawdown is the preferred route,” he continued.

“The rise in annuity rates has increased demand for guaranteed income, but there are also innovative products being introduced that blend drawdown and annuity, which is also increasing interest."

Lowe suggested that this allowed people to “rest easy” knowing they had sufficient income to cover their essentials and could still invest their remaining capital for growth if they chose.

“There has never been a better time to explore guaranteed income for life, given the strong rates available.

"More people are choosing to shop around, and a competitive market is providing an increasing range of tailored solutions,” he added.

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