Drawdown popularity 'increasing'

The popularity of drawdown mortgages, which allow the holder to make withdrawals as funds are needed, is increasing, it has been claimed.

Figures from Key Retirement Solutions show a rise in the number of people looking to the products to fund their twilight years.

More than half of all plans are now on a drawdown basis, rather than paying out a lump sum.

The trend represents a doubling in the popularity of the product from 23 per cent of all pensions in 2006 to 51 per cent in 2007.

Business development director Dean Mirfin comments: "The increase in the drawdown facility is in line with predictions as many consumers prefer the option due to the cost advantages."

He adds the prediction that continued uptake of drawdown schemes will maintain the figure at "a 50 to 60 per cent share of total plans sold" in 2008.

Mr Mirfin previously warned that any means of obtaining funds in retirement by releasing equity from the family home should be discussed with relatives before any decisions are made.