The government's move to cap pension charges ignores annuity contract 'cowboys' who are ripping off retirees, the Telegraph claims.
The paper said more than 1,000 people a day are losing large chunks of their pension due to annuity salesmen misleading clients. It said salesmen are telling people the process is free.
However, up to £3,500 is taken from each £100,000 pension pot through charges at purchase, the paper said.
These kind of fees were not addressed in Steve Webb's pension charge cap consultation, released last week. He wants to see all pension funds used for auto-enrolment working to a maximum of 0.75% annual management charge.
Independent pension consultant and former government adviser Ros Altmann said both insurance companies and third-party annuity brokers had been given "a licence to steal".
She told the Telegraph: "There is no problem with making a reasonable profit, but in some cases we are talking about excessive margins which eat into payouts that must last several decades. People are sometimes paying for the wrong product or not even getting the best rate."
Speaking in Parliament last week the pensions minister acknowledged the annuity market needed reform and said there were "serious questions" about whether they are suitable for everyone at retirement.
Creates £11bn asset management business
And more competition
Launched November 2018
£15m group claim