Price of not shopping around: £7bn

Pensioners have lost out on £7 billion of pension income over the last decade because they have failed to look for the best annuity available to them, it has been estimated.

Research by retirement specialist Partnership found that 70 per cent of pensioners with funds under 40,000 missed out on vital income either because they accepted the annuity rate offered by their existing pension provider instead of shopping around, or took a standard annuity when they were entitled to an enhanced version, which pays out more to smokers and those in ill health.

The figures emerge after the government warned on Thursday that it could take action against insurers that fail to make people aware of their right to shop around.