Annuity sales have fallen from around £2.5bn a quarter, prior to the 2014 Budget when the rule changes were announced, to as low as £990m since the freedoms were implemented, according to ABI data.

Despite this, a survey by Legg Mason Global Asset Management suggested most so called millennials intend to include annuities in their retirement strategies.

Some 84% of this younger age group said they were ‘highly likely’ to consider using an annuity despite being under no obligation to do so.

Millennials with large pools of assets (those with at least £699,000 of investable assets) were even more enthusiastic, with 92% of respondents in this category saying they were ‘highly likely’ to buy one.

Older savers said they planned to eschew annuities, with 72% of investors aged 40 or over said they did not intend to buy one.

Adam Gent, head of UK sales at Legg Mason, said: “Last year’s effective removal of the need to buy an annuity has had a huge impact on sales and our research suggests the market is unlikely to stage a significant recovery anytime soon.

“However, it is fascinating to find that younger investors, particularly those with larger pools of investable assets, are far more interested in using an annuity as part of their overall retirement strategies.

“That would imply that, while providers are likely to continue to struggle with the fallout of the pension freedoms in the short term, annuities could still have a big part to play in the UK retirement market in the coming years.”