The government's dramatic overhaul of pensions has major implications for the annuity market.
In what is the biggest overhaul of pensions since 1921, chancellor George Osborne said individuals would no longer be forced to buy an annuity on retirement.
The government also said it would cut the income required for flexible drawdown from £20,000 to £12,000.
It also said the cash limit for taking a lump sum out of the benefit has increased from £2,000 to £10,000. Additionally the total savings pot which can be taken as a lump sum will rise to £30,000.
The industry reaction to the bombshell was wide.
Key Retirement Solutions director Dean Mirfin said: 'The whole retirement saving landscape has been shaken up and the chancellor’s talk of the most far-reaching reforms since 1921 are absolutely correct.'
He added: 'He [Osborne] has fundamentally changed the way people save for retirement and how they take their income. The changes he has announced recognise that people’s lives have changed and that savers need to look at all their assets before making a decision on retirement income.'
Stephen Ford, head of investment management at Brewin Dolphin, said: 'This is a total game changer and will result in the almost immediate death of the annuity.'
Meanwhile accountancy firm EY said while the changes are good news for consumer, it does not necessarily mean Armageddon for the annuity market.
'The changes to rules on pensions will be very liberating for consumers. There’s nothing fundamentally wrong with annuities but at current interest rates they have seemed pretty poor value so the flexibility for consumers to choose an alternative is welcome.
“It’s not necessarily Armageddon for annuities- a lot will depend on interest rates going forward. On the face of it this could seriously dent the annuity market in the short term, but how many people will actually opt to take the cash and invest it is yet to be seen.
'The fact that the tax rates have dropped will be helpful, but people will still pay tax on all but the first 25% and, depending on what happens with interest rates, an annuity may still be attractive.'