HM Government has decided not to go ahead with plans to introduce a secondary annuities market, believing that it cannot protect consumers from sharp practice adequately without stifling the market’s development.

Over the past few months officials have been participating in many discussions with the financial services industry and the Government has come to believe, to quote its website, that "creating the conditions to allow a vibrant and competitive market to emerge, with multiple buyers and sellers of annuities, could not be balanced with sufficient consumer protections."

Many firms have shown that they are willing to allow customers to sell their annuities, but the Government is sure that there will not be enough purchasers to create a competitive market. It also worries that such a market might "produce poor outcomes for consumers, such as receiving poor value for their annuity income stream and suffering higher costs." Its website argues that it cannot guarantee good 'value for money' for customers in so small and limited a market, although this might prompt readers to wonder why the Government has suddenly, for the first time ever, set out to guarantee any such thing. It has estimated that only 5% of people who hold annuities at present would take advantage of such a plan.