The difference between the average purchase funds size for a lifetime annuity versus drawdown has grown almost three times bigger since the launch of the pension freedoms, research suggests.
From April 2014 to April 2015 the average drawdown fund size was 17% higher than that of the average lifetime annuity fund, according to My Pension Expert.

Since the pension freedoms became active in April this disparity has grown to 46%, the retirement website reported.

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Scott Mullen, director at My Pension Expert, said: “Since the pension freedoms came into effect we’ve seen a big surge in the popularity of drawdown products, predominantly with those with larger pension pots. This is directly responsible for the results of our latest research.

“Those with larger pension pots tend to be more willing to take on the associated risks with drawdown, as the policy may not be their only source of income. Whereas the opposite is usually the case for those with smaller pots, as their policy is often their main source of income.”

He said: “Also in my experience those with larger pension pots are willing to dedicate more time and effort towards monitoring their finances.

"This is essential for a drawdown product as they require careful management. Those with smaller pots however tend to want everything wrapped up, so they’re not having sleepless nights over their finances, hence their preference for annuities over drawdown.”