The FCAs' thematic review of the annuity market has been criticised as not going far enough fast enough.
Headline results of the review showed 80% of consumers buying an annuity from their existing provider would be better off if they shopped around.
The average benefit of switching is equivalent to having an extra £1500 saved into a pension pot. This equates to an extra £71 per year income for someone with a £17,700 pension (the average size in the review).
FCA chief executive Martin Wheatley said: "The need to get an income in retirement unites us all. But once you've bought an annuity you can't change your mind. For most people getting the right annuity could mean the equivalent of an extra £1500 in savings -so we need to understand why they aren't shopping around and switching."
The FCA has announced a market review to assess competition in the market. This will look at how firms behave and treat customers when selling an annuity. Interim findings will be published in the summer with final findings published within 12 months.
However, MGM Advantage's pensions technical director Andrew Tully believes more needs to be done to help consumers shopping around for a retirement income.
"The FCA review doesn't go far enough, or act quickly enough. This will potentially leave many thousands of retirees high and dry when navigating the annuity minefield," he said.
"Although the review puts the spotlight firmly on the issues that need to be addressed, another year or two of customers sleepwalking into retirement is simply not good enough."
Barnett Waddingham consultant Malcolm McLean agreed: "It is disappointing that after a full year we have to wait many months more for a second stage investigation by the FCA before regulatory action of some description can be initiated."
Looking at small pension pots (less than £5,000) the review found only three firms offering standard rates but these are not openly marketed. The situation gets worse when it comes to enhanced rates with 10 out of 12 providers offering enhanced rates to existing customers not offering to small pots.
Wheatley said the market had effectively "shut the door" on those with small pension pots and more competition was needed.
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