A third (33%) of annuity buyers failed to compare rates from two or more providers before purchasing, according to a new report.

One in three adults (35%) over 50 bought their annuity from the same provider they saved with, according to the report from retirement consultancy Just.

A further 12% of those surveyed were not sure if they had compared annuity rates or used their savings provider or not.

These buyers could be missing out on over £400 a year by not shopping around for the best rate available, according to the data from Just.

The gap between the best and worst paying annuities has widened considerably in recent years, according to the firm.

Source: Just Group

Three quarters (74%) of adults between 50 and 69 and planning to access their DC pension savings in the next two years did not know that some health conditions could increase their annuity income.

Stephen Lowe, group communications director at Just, said: “Higher rates on guaranteed income for life products have increased customer interest but there are still too many ‘zombie buyers’ who are not shopping around to get the best annuity deals available.

“Over the course of an entire retirement, a saver failing to shop around could be missing out on thousands of pounds of extra income – the closest thing in the financial world to being given ‘free money.’”

• Just analysed the latest data from the FCA’s Financial Lives Survey.