Shopping around rates have fallen since the introduction of the pension reforms leading to savers missing out on over £100m, new figures show.
According to Retirement Advantage research, the difference between the best and worst priced annuities on the £53,500 average-sized pension pot is currently £214 a year.
Based on Association of British Insurers data, published this month, only 40 per cent of people bought an annuity from a different provider than they saved with.
This means savers have lost out on £104m between April and September, the firm says.
In addition, the proportion of people shopping around has fallen. In 2012 and 2013 external sales accounted for 48 per cent of all annuity purchases.
Pensions technical director Andrew Tully says: “Despite measures being introduced in April to try and encourage better practice, the situation is getting worse, and the market is failing consumers.
“The issue of poor value extends to drawdown. While drawdown is not a one-off purchase it is still important people look around the market for the right drawdown product, as you could easily find yourself caught out by high charging or complicated products. It will pay dividends to get professional financial advice to help find the right blend of products and the best value in the market.
“Unfortunately, the shopping around message appears to have been lost in the general noise around pension freedoms. We need firm and decisive action from the regulator to ensure the market works in the best interests of consumers.”