The Annuity Bureau has welcomed the Treasury's proposal to increase the age individuals must buy an annuity to age 80 from 75.
The retirement specialists say the move has been long awaited and is much needed.
It believes the move will allow people greater investment freedom which in turn will benefit the income drawdown market.
It says the Government is not going as far as abolishing the necessity of purchasing an annuity, but it claims it does not support that step anyway, because it would be too beneficial for the rich.
Annuity Bureau managing director Peter Quinton says “The question of abolishing the need for annuity purchase will no doubt raise its head again, but this decision to shift the age to 80 means, for the present, annuities are set to stay. The recent surge in new annuity products reflects the providers commitment to this market.”