Suggestions that the annuity is dead following last week's radical Budget are premature but insurance companies must ensure it does not become extinct like a dodo, a financial consultant says.
Chancellor George Osborne stunned the pensions sector by announcing from April 2015 nobody will have to buy an annuity.
Richard Phillips, consultant at Altus, which works with financial services firms, said there is a need to resurrect the annuity as a more flexible and innovative product.

{desktop}{/desktop}{mobile}{/mobile}


He said: "Since the Budget, much has been said about the death of the annuity product but I suspect the pronouncement of death may be premature. Annuities have been around in one form or another since the medieval times and I doubt they are going to disappear any time soon.
"Instead of standing around eulogising the death of the annuity, we need to get out the defibrillator and see if we can bring it back to life.
"What we are seeing is the death of the standard annuity. Now it's over to the insurance companies to ensure that what rises out of the ashes is a phoenix not a dodo."
He said innovation was key to make it a more flexible product and cited the main issue at the moment is that interest rates are low so annuity rates are too.
He suggested exploring variable rate annuities linked to investment performance.
He added: "Why not explore hybrid annuities where you maintain control of at least some of the assets to cover unexpected expenses?"