Currently people wanting to sell their annuity income to a willing buyer face a 55% tax charge, or up to 70% in some cases. Following a consultation on the issues, which closed this summer, the government has now said it will remove this charge from 6 April 2017, so people are taxed only at their marginal rate.

Under the new changes retirees will be able to take the annuity as a lump sum, or place it into drawdown to use the proceeds more gradually. Previous pension reforms, which came into effect this year, offered these options only to those who had not already retired and so not exercised their right to an annuity.