New rules that make it easier for retirees in the United Kingdom to access their defined contribution pension funds have dampened interest in annuities.

According to a report published by industry research firm Timetric, individual annuity new business premiums in the UK dropped from £12.4 billion in 2013 to £7.0 billion in 2104, a decline of 43.3%.

In April of this year, new legislation allowed British people age 55 and older greater choice when deciding how to use their pension savings. They may still buy an annuity, but they can also draw down funds gradually or on an ad-hoc basis, or they may cash in their funds entirely.

Timetric says that those with smaller pensions are expected to use the new pension freedoms to cash in all of their money, while those with larger amounts are more likely to withdraw just the 25% tax-free lump sum upfront and use the remainder to provide them with a regular income.

“The reforms are expected to continue to drive down annuity sales in 2015, but uncertainty remains over the future level of sales as it is yet to be seen how investors will behave in the light of the new freedoms,” says Laura Balkarova, an economist at Timetric. “Third-way products, such as unit-linked guarantees, fixed-term and investment-linked annuities, may become more relevant to savers looking for alternatives to conventional annuities.”