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It believes with-profit annuities will be of increasing interest to advisers whose clients are prepared to accept an element of risk.

A with profits annuity offers customers security, in the form of a guaranteed minimum level of income but also provides the opportunity for income growth.

L&G says that as life expectancy improves, the investment potential offered by a with profits annuity may help to counter the impact of inflation on pension income over the longer years of retirement.

As an aid to advisers, L&G has produced a new guide to use with customers which outlines how with profits annuities work.

There is also a questions & answers booklet that helps to address some of the main concerns and issues that customers often raise when considering a with profits annuity.

Tim Gosden, head of annuity product development for L&G's individual annuities business, said people do not appreciate how long they are likely to live in retirement and may have to rely on their pension for 20 years or more.

"This is a long time to live on a fixed level of income provided by a conventional annuity, particularly given the likely impact of economic changes over that period.

"With profits annuities may appear more complicated than conventional annuities but the underlying concept is straight forward."

"We hope the new literature and website will help advisers to clarify and explain the benefits of with profits annuities so dispelling some of the myths and negativity," he said.