Independent financial advisers need to double the amount of annuity business they do to keep income streams up, according to research from Just Retirement.

As mortgage lending and sales of other traditional income generators remain low, many IFAs are looking at other ways to generate more business. But despite the annuity market being one of the few growing areas, one in three IFAs has written fewer than ten annuity cases in the past year.

Just Retirement commissioned research looking at the barriers that prevent IFAs from writing more annuity business in order to understand what added support the industry can provide to make the annuities easier to arrange and more profitable for IFAs to advise on.

The research found almost half of IFAs stated that larger fund sizes would incentivise them to write more annuities. However, almost a quarter (24 per cent) said they would be happy to refer small cases to a third party if this option was available, of which half of these would refer them to another IFA.

In terms of other solutions, one in four IFAs said they believed increased support from providers would encourage them to write more annuity business, one in five (21 per cent) have said that a simplified advice process would also be beneficial. The perception that administration is both cumbersome and time-consuming was also highlighted with 39 per cent saying that a simpler process would encourage them to consider writing more business.

Nigel Barlow, the head of retirement solutions at Just Retirement, said: “Our research highlights the need to raise awareness of annuities amongst IFAs as well as a potential review of the whole process itself. With a staggering one million people set to retire every year, the annuity market is predicted to be worth £20 billion by 2012. An increase in annuity knowledge and a simpler process would lead to more IFAs becoming engaged with the market. There have been some significant advances in recent months, most notably the Origo ‘Options’ initiative which is dramatically reducing processing times for some annuity applications and we are continuing to work with the industry to continue to improve service provision.

“Interestingly, almost half of the IFAs surveyed said they have seen no change in the demand for annuities in the current climate, stating that business in this area is being sustained, which confirms the real value and security annuities can offer in uncertain times. Therefore an increased awareness of annuities could only help facilitate the process of encouraging people to shop around and make use of the open market option.

“It is interesting to see that a number of IFAs would like to refer smaller cases meaning that there is the potential for more clients with smaller funds to gain access to the Open Market Option, which can only be good news for people coming into retirement.”