For those approaching retirement, it’s a very scary time. Possibly the scariest period ever known for choosing a retirement option.

In addition to falling markets, failing institutions and a growing realisation that the lost generation of 35-55-year-olds aren’t saving enough, research consistently proves the public has little to no knowledge of what choices are available for them at the end of their working lives.

Pensions planning has had a pretty good run of things in recent years. Despite the negative aspects of the regulatory carousel (Wurlitzer might be more apposite), A-day placed the subject squarely on the agenda for dinner parties and opened up pension saving to many more investors who had previously ignored the possibilities.

The at-retirement and post-retirement markets – always a difficult area thanks to the all-or-nothing one-way bet of annuity purchase, or the suck-it-and-see approach to income drawdown or unsecured pension (USP) – were showing promise, having never looked so appealing, or flexible, before the credit crunch of 2008.

In a recent survey of 130 financial advisers, 90% believed that falling annuity rates would result in them having to explore alternatives to the conventional annuity. So the market is waking up to the new dawn of retirement income, but are they reacting quickly enough?

The MGM Advantage annuity index has revealed conventional annuity rates have fallen 7.14% since June last year. So the fact Solvency II is predicted to decrease rates by a further 7% to 9% by the time it is implemented in January 2013 feels irrelevant if they are to continue to decline at this rate in the meantime.

In recent years the combination of falling annuity rates and increased life expectancy has led to claims that annuities offer poor value for clients.

Annuities remain the only way to provide a guaranteed income throughout a client’s lifetime – is this a fair claim?

With the consultation on removing the requirement to annuitise at age 75 in full swing, now is a good time to revisit the benefits of annuities and the processes involved.

Anyone who doubts the ability of the financial services market to innovate need only look at what has happened in the at-retirement market over the past 10 years or so.

Once, the only route open to those seeking to convert a pension pot into income was some form of conventional annuity, although even here choices had to be made. Now the choice is very wide indeed, partly as a result of regulatory change and innovation from the industry. However, structural problems remain and these are centred in how the proposition of annuitisation is seen by consumers.