Trend towards lump-sum withdrawals
The decision to take a lifetime annuity, a lump-sum payout or a combination of the two on retirement is one of the most important financial choices our members take. Our study shows a clear trend over time, with more and more opting for a full or partial lump-sum withdrawal. In 2013, around 33% of our members took at least part of their retirement assets as a lump sum; by 2023 this had risen to 57%. One particularly noticeable increase is in the proportion taking the full amount as a lump sum, which quadrupled from 6% to 20%.
Tax considerations and financial flexibility driving the decision
The reason most often given for a lump-sum withdrawal is tax considerations, with more than half of those surveyed saying this had a substantial influence on their decision. Other major factors include a desire to invest their assets more flexibly and in accordance with their own wishes, and a need for financial resources to, for instance, repay a mortgage. The fourth most important criterion driving the choice of a lump-sum withdrawal is that the conversion rate – which determines the ratio of retirement assets to pension – is too low.
Rising demand for advice
Our results also show that advice plays an important role in the decision-making process. Members opting for a lump-sum withdrawal take outside advice almost twice as often as those choosing an annuity. This trend underscores the growing need for professional guidance when making this complex decision.
Looking ahead
We will continue to monitor developments in relation to lump-sum withdrawals and ensure that our members receive the best possible support and information. The long-term impact of these trends on retirement provision in Switzerland will become clear in the years ahead.
