He added: "Buyers would naturally be suspicious about the health of people who wanted to sell, and that would be reflected in the price. The difference between the cost of buying an annuity and the cost of selling back the same annuity could easily attract negative headlines."
A campaign asking for a secondary market was launched in July, urging the government to allow five million pensioners that retired before April 2015 to have access to pension freedoms.
Your Pension Your Choice, which gathered the support of six MPs, is being funded by DRB Pension Assistance, the UK subsidiary company of DRB Capital, a purchaser of annuity payments in the US.
Mr Lloyd, and one of the signatories of the campaign, said: "By introducing the pension freedoms, the Liberal Democrats ensured no one would have to buy an annuity, particularly if the annuity was an inferior product to other options they had.
"Allowing those who had already bought annuities to sell them on the market if they so wish is the next logical step."
However, the petition launched by the campaign in July has only canvassed 302 signatures so far.
Neil Walsh, pensions officer with union Prospect, criticised the campaign, saying "there is no evidence that there is any significant level of demand for a secondary annuity market".
William Burrows, retirement director at Better Retirement, said selling an annuity would only make sense if it was a very small payment.
He said: "If someone has a decent size income it is simply not possible to replace it by selling it on the second-hand annuity market. The lump sum people get by selling an annuity won't replace the income they will be giving up."
maria.espadinha@ft.com
