The Department of Social Security may sell stakeholder pensions and annuities over the phone as part of its drive to modernise the benefits' system.
A telesales operation selling the new stakeholder pension is one plan which could be considered as part of the DSS's review of pension provision in the UK.
The DSS has confirmed that it may look at the radical plan to extend the remit of the Benefits Agency, allowing it to sell the products.
This could be done by extending a pilot project announced by the Government last week. The DSS is to let 10,000 London pensioners collect their pension over the phone using phone-banking techniques.
If the trial is successful, the direct sales proposal could be included in pensions minister John Denham's White Paper which is due to be published next year.
Such a move would reflect the Government's belief that a growing number of people want to make financial transactions over the phone.
DSS pensions spokesman Barra McGacky says: "There is another generation of pensioners who are used to transactions over the phone. Obviously, if this proves popular and helps promote a modern department, then we will consider extending the service."
Life offices admit that direct selling by the DSS could slash costs but have warned that it could create advice problems.
Scottish Mutual pensions technical director Leslie Gray says: "It all depends on the design of the product. If it is similar to a PP, then advice will be needed."