Furthermore, a large number of Australians worrying about their savings running out during retirement present a perfect opportunity for the annuity market to develop.
Almost half of financial planners surveyed for the Investment Trends December 2011 Retirement Planner Report said they would use annuities in 2012.
Meanwhile, a quarter of Australian adults surveyed expressed some interest in this product.
However, there are many barriers to financial planners using annuities, according to senior analyst Recep Peker.
"For some they compete with other products in a high interest rate environment, such as term deposits that are easier to understand and return close to six per cent per annum," Peker said.
Most popular are long-term and short-term annuities, while lifetime annuities are only recommended by a small percentage of planners, according to Investment Trends.