Annuity products vary widely from provider to provider, retirees have been warned.
Laith Khalaf, a pensions analyst at Hargreaves Lansdown, said that customers should shop around for the best deal in order to maximise their retirement incomes.
All annuitants retain the so-called "open market option" – which allows them to take out an annuity with a firm other than their pension pot provider.
Analysis from Hargreaves Lansdown suggests that incomes can be boosted by 20 to 30 per cent in this way.
Many retirees who fail to exercise this option – and therefore face a disappointingly low income – still have the opportunity to boost their finances through an equity release plan.
Mr Khalaf added: "There is a lot more awareness of the open market option where people are shopping around for annuity.
"Take-up rates are still not as high as we would like them to be, they should be higher. This is one of the things we have always suggested is that your default position when you come to retirement should be that you have to shop around."
Posted by Richard Planner
