The government have abandoned plans to allow people to sell their pension annuities for cash.

The Treasury made the decision because consumers could not be guaranteed they would receive good value for money.

The planned changes would have enabled people to sell their annuity income if they wanted to without the current tax restrictions, providing their annuity provider agreed.

An annuity is something people can buy from an insurance company with their 'pension pot'. It is an annual retirement income that is paid to them for the rest of their life.

The plans would have offered people who already hold an annuity similar freedoms to those approaching retirement, who are no longer required to buy an annuity with their pension pot following the freedoms launched in April 2015.

The 2015 retirement freedoms did not apply to people who are already locked into an annuity.

But the Treasury said that while many firms had shown they were willing to allow customers to sell their annuities, it is clear that there would not be enough buyers to create a competitive market.

Economic Secretary to the Treasury, Simon Kirby said: "Allowing consumers to sell on their annuity income was always dependent on balancing the creation of an effective market with making sure consumers are properly protected.

"It has become clear that we cannot guarantee consumers will get good value for money in a market that is likely to be small and limited.

"Pursuing this policy in these circumstances would put consumers at risk - this is something that I am not prepared to do."

The government said it had always been clear that for the majority of people, keeping their annuity incomes would be their best option.