Annuities- does anyone still go for them?

[Birdist]

Just looking at annuity rates today and saw that you can get a joint life (50%) annuity with 3% escalation paying 3.94% for a 55yo. I've always thought that nobody goes for annuities any more but that actually seems...quite good. (Obviously you might do better staying invested but if you're risk averse or want to take a no risk option with part of your pot and leave the rest in equities, it seems a reasonable rate.)

Just wondered if anyone on here is thinking about annuities as they seem very much out of fashion.

Looking at the way my draw down pension is being decimated by Trump and Putin I wish I was on an annuity.

They are definitely a better option now than they've been for a while.

They fell out of fashion due to a combination of drawdown becoming available and poor annuity rates. I can see an upside to doing a mix of annuity and drawdown to give a mix of certainty and risk taking

This.

Spread your risk. An annuity to cover your essentials, then drawdown for luxury stuff and non essential spending.

Annuity rates are linked to gilt yields. Due to rising rates they are becoming more popular.
There are whole life annuities, but it's also possible to buy a fixed term annuity, with the return of a lump sum on maturity. This might be useful to bridge a gap between retirement and state pension age, for instance.

Although you say 'Obviously you might do better staying invested', it's worth mentioning the 4% rule of thumb - which says people should be able to withdraw 4% of their retirement pot in the first year after retiring, and take that amount, adjusted for inflation every year for the next 30 years without running out of funds. On that basis, a 55 year-old receiving a return of 3.94% guaranteed for joint life looks quite attractive.

People always live forever when there is an annuity to be paid them.

Highly motivated!

Sense and Sensibility wisdom!

I think there are advantages to having some
certainty especially if the ups and downs of the market are likely to bother you. I think they’ll come back into favour as more people access drawdown pensions

I’ve seen quite different approaches in my parents and in-laws. One side has a mix of traditional pensions paying fixed income plus savings managed by an IFA with quarterly statements. The other are self managing a SIPP and the psychology is very different. The latter side is looking at the markets every day and getting quite stressed by losses, trying to second guess things etc. I always thought I’d prefer the flex of drawdown but I think it’s been quite a burden for my relatives. The ones who don’t have to think about it have a different sort of mental freedom.

Annuity rates are quite good at the moment and, if they stay that way, I will definitely use them them for a good chunk of my pension provision. I don't have any children that I want to leave a pension pot to and I don't fancy managing/watching investments beyond my mid 70s.