The FCA's review of annuities fails to go far enough and will be too slow to help thousands of retirees, a pensions director says.
The findings of a major study into the sector were published this morning. Read more HERE.
But despite its damning conclusions on the 'disorderly' market and the announcement that a competition market study will take place, MGM Advantage's Andrew Tully believes it is inadequate.
Mr Tully, pensions technical director, at MGM Advantage, said: "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.
"So often we see poor consumer outcomes through a lack of awareness or understanding of the options available. 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."
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The FCA found eight out of ten people could get a more generous retirement income by shopping around and buying an annuity from a different provider.
By not switching this group is losing £1,500 on average, researchers discovered.
Richard Rowney, managing director of LV= Life & Pensions, said: "We welcome the findings of the FCA report which highlights, not only the importance of shopping around, but the significance of seeking advice at the point of retirement to ensure consumers make the most of their pension pot."
The National Association of Pension Funds backed the competition study.
Joanne Segars, NAPF chief executive, said: "The finding that 80% of consumers could be better off by shopping around is a damning indictment of a market that can be considered inefficient at best.
"The FCA's review has done good work in highlighting issues about which the NAPF has long shared concerns.
"It is clear that consumers are better off shopping around but the stark fact remains that many do not often because of their lack of confidence and knowledge."
David Barral, chief executive of Aviva Life, said: "A market study is the right place to begin a thorough review of the annuities market and we see this as a very positive step for consumers and our industry.
"Sustained consumer awareness and education campaigns will need to go hand in hand with legislative change to influence consumer behaviour in this area."
Caroline Rookes, chief executive of the Money Advice Service, said: "The level of money people are missing out on is really concerning - money which could make a major difference to the quality of someone's life in retirement."
Andrew Megson, managing director of Retirement at Partnership, said: "Getting quotes from a variety of providers and finding out if they are eligible for an enhanced annuity should be part of everyone's retirement planning and the financial services industry needs to provide them with options and opportunities to do this as easily as much as possible."
Scottish Widows and Aegon also backed the review's findings.