Short-changed on future pension income A damning report from the National Association of Pension Funds (NAPF) said that part of the problem was that people get too little support from employers or providers when making a decision about their annuity - often they get nothing more than a leaflet pointing them to a website with a postcode-based search engine.
The process for choosing an annuity - which provides an income for life - is a complex one and the majority still go for the default option of a standard annuity by sticking with their pension scheme provider.
The report says that this failure to shop around for a better deal can wipe 30% off their annual pension income, and in some cases up to 50%.
Crucially, you only get one shot at picking an annuity - it's not something you can switch if you find a better deal at a later date.
There are many types to choose from and so settling for the default option of a standard annuity is unlikely to be the one for you.
Those linked to the retail price index, a measure of inflation, have been popular among savers who do not want to see their pension income eroded as a result of rising prices. The drawback is that they are more expensive than level annuities and initially pay out less income. But while the spending power of the level annuity will fall, that of the inflation-linked annuity should remain the same.
Married couples should consider a joint life annuity. By taking a standard, single life annuity payments will cease if you die and leave your spouse without an income from that pension.
Your health is also a huge factor in this process. Many can benefit from an "enhanced" annuity which pays more if you have poor health or if you smoke because life expectancy drops which means the company knows it won't have to pay out as long.
The Association of British Insurers (ABI) recently proposed a host of new measures in a consultation paper that aims to ensure people buy the right annuity, starting with sending out a standard statement about the benefits of looking at what's available from other providers.
The ABI has stated that companies should offer comparable options and include a very clear statement about the benefits of enhanced annuities due to medical conditions, even if the provider does not offer the product. Providers' sales processes must take customers through the key questions they should consider when buying an annuity.
But between now and any positive outcome of such a consultation thousands of people will retire and purchase the wrong annuity.
The most important thing is to do your homework when you come to convert your pension savings into an income. Particularly since there are new things coming to the market that might help you organise your finances better.
It's possible to buy shorter-term annuities - for between three and 10 years. These pay a guaranteed income during the period - there is no investment risk - and people simply buy another annuity at the end of the term.