Pushing the shopping around message to retirees does not go far enough and the industry should work together to highlight the need for advice, according to website Unbiased.
Chief executive Karen Barrett said the Association of British Insurers' (ABI's) move to publish sample rates every month from all providers highlighted the issue.
The ABI published its first comparison table this morning. All its members are now required to give sample rates based on criteria which will change from month to month.
Rates (see below) were based on a 65-year-old from Manchester with a £18,000 pot. The best rate on offer was £1,099.92 and the worst was £839.52. A difference of about £260 a year.
The worst rate came from Scottish Widows / Clerical Medical / Halifax (Lloyds Banking Group) and the best from Reliance Mutual.
The annuity rate table criteria can be changed in terms of postcode, health and marital status to give alternative rates.
Barrett (pictured) said while this information was good for the consumer the process of buying an annuity - which cannot be changed after point of sale - should be advice led.
She said: "We do agree that there is a clear benefit in people taking time to review their options when it comes to their annuity purchase but we also recognise that many people simply won't be able to confidently choose the best option for them.
"A general ‘shopping around' message simply doesn't go far enough - the industry needs to focus on clearly demonstrating the value whole of market advice can add to the process of securing an annuity income for the future - enabling consumers to understand all the options available and achieve the highest income possible.
"We are calling on the industry to work together to empower consumers to seek whole of market advice at retirement and to do this by clearly highlighting the need for and benefits of whole of market financial advice."
Barrett said website Unbiased had seen a 9% uplift in the adviser searches in the first four months of the year, compared to the same period last year.
"We also know that retirement planning has always been the biggest trigger for people seeking advice, so it is clearly an area where people appreciate the need for professional advice.
"We look forward to working with the rest of the industry to help make consumers aware of where they can go to find an annuity adviser so that they make the right choices for their annuity options."
Hargreaves Lansdown head of pensions research Tom McPhail said backed the initiative but said more needed to be done.
McPhail, who also heads up the Pension Income Choice Association, said: "Over time, this Annuity Window will allow us to track the competitiveness of different pension companies' annuity offerings and to identify those companies which consistently fail to come up to scratch.
"The ABI should be applauded for taking this initiative, however there is still more work to be done to make sure every defined contribution pension investor quickly and easily shops around for the best deal as a matter of course."
He added: "The process which launches pension investors into their retirement still makes it too easy for savers to end up buying the wrong type of retirement income. More work still needs to be done to simplify the retirement."
See below for the full table.
65-year-old, annuity purchased with £18,000
|Annuity provider||Annuity per year|
|Axa Wealth||Rates offered by Legal & General|
|Fidelity||Sources rates from across the market|
|Just Retirement||Not offered for profile|
|Legal & General||£1,069.92|
|LV=||Not offered for profile|
|MGM Advantage||Not offered for profile|
|Partnership||Not offered for profile|
|Royal London||Rates offered by Prudential|
|Royal London (CIS)||Rates offered by panel|
|Scottish Widows / Clerical Medical / Halifax||£839.52|
|Sun Life of Canada||£979.24|
|Wesleyan Assurance Society||£905.16|
|Zurich||Rates offered by L&G|
|Lowest annuity rate||£839.52|
|Highest annuity rate||£1,099.92|
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