The Watson Wyatt study of 3,500 individuals aged between 50 and 64-years-old found that most people did not want to annuitise their retirement savings due to a lack of flexibility.

Some of those polled also expressed a lack of trust in the insurance companies providing annuities.

“It will come as little surprise to most that a substantial core of potential retirees are hostile to annuities,” said Mike Wadsworth, a partner at Watson Wyatt.

The study conducted in partnership with YouGov indicates that concerns over loss of flexibility and possible loss of value on early death outweigh the positive features of annuities, such as security and sustainability of income, in the minds of many retirement savers.

Mr Wadsworth concluded: “Regulatory change in the form of greater flexibility for forms of retirement income and capital protection, as in the government proposals for simplifying the taxation of pensions, may help [improve the public’s perception of annuities].”