Hargreaves Lansdown head of pension research Tom McPhail said the annuity market is projected to grow to 7bn-12bn by 2012 and the bulk buyout market will grow from its current 2bn-3bn a year to up to 128bn a year in the same timeframe. He said if the market gets anywhere near this size it would collapse due to lack of capacity. Annuity rates are also expected to continue to decline and after A-Day, this will only worsen, with many wealthier clients expected to favour alternatively sec-ured pensions over annuities, effectively stripping out subsidies to the total annuities pot. Altmann said insurers’ unwillingness to take on longevity risk is set to grow and can only be assuaged by the Government launching longevity bonds or ultra- long-dated gilts. She said: “There will come a point in the next 10 years when annuity providers will not be able to meet demand.” McPhail said: “If the deferred annuity market gets anywhere near 128bn a year, it will collapse because the capacity is not there.” Millfield Partnership pension specialist Graham Duckett says the anticip-ated fall in annuity rates over the next 17 years will wipe out any investment growth over this period.