The paper claims the proposal is being seriously considered by the most senior members of the government, and that the Treasury had already spoken to pension providers about the viability of the plan.

On more than one occasion since George Osborne outlined reforms to the UK pension regime, pensions minister Steve Webb has mooted the prospect of annuity holders selling on their policy, but the proposals have been met with limited enthusiasm by the pensions’ industry.

As of 6 April, it will no longer be mandatory for those with a defined contribution (DC) pension to purchase an annuity; This new initiative would mean that the five million retirees who have already bought a policy would be able to participate. Sales of annuities collapsed last year, and some within the industry believe that many holders only took policies grudgingly due to a lack of alternatives. “I have heard from so many who say, if the pension freedoms had been in place earlier, they would never have bought an annuity, but they had no choice at the time,” said Ros Altmann, an independent pensions expert. “They never wanted an annuity, often they are receiving very little income, have no inflation protection and would much rather undo the deal.”

The Financial Times hypothesise that if the reform was enacted, private companies would purchase annuities from current holders, either to hold or to sell on to new customers. Prices would be calculated according to a holder’s life expectancy and income.

However, reaction to the rumoured change was generally negative.

While acknowledging that “for a minority of existing annuity investors this idea could make sense,” Tom McPhail of Hargreaves Lansdown believes significant costs and risks associated with the plan would outweigh any potential benefit. McPhail believes the chances of the idea ever getting off the ground to be slim, but welcomed the prospect of a consultation on the subject, to explore it in more detail.

Alan Higham of Fidelity also expressed doubts about its likelihood – and viability. “I don’t see how it can work in practice,” he said. Higham was likewise amenable to a consultation, but believed it would conclude that “most people would get appalling value for money if they were to sell their annuity. I just don’t see how something like ‘We Buy Any Annuity.com’ could work.”

Conversely, John Lawson of Aviva greeted the news positively, saying he “would like the government to consider the idea.” Lawson believes a portal to trade annuities could be effective work, and likened the prospect to other online second-hand markets. “For example, if you have a specific car you want to sell, dealers interested in that model will bid for your business, and they get into a bidding war. Consumers would benefit as a result.”