The government has abandoned plans to launch a secondary annuities market next year, citing consumer protection risks.
The proposed market would have allowed individuals to sell their annuity to specified companies in return for a cash lump sum or a flexible drawdown policy.
But on Tuesday the government said there were too few purchasers available to create a competitive market and this put consumers at risk of high costs and poor value for their annuity.
The plans were originally announced by former chancellor George Osborne in 2015 to give people who bought annuities before the introduction of pension freedoms the same choices as those who retired later.
The u-turn was broadly welcomed by the retirement industry. Steven Cameron, pensions director at Aegon, said: "All the signs were that the secondary annuity market would have been a pension freedom too far. Giving up a guaranteed income for life is a huge decision and not the right one for the vast majority."
