High pension charges and buying the wrong annuity could cut savers' potential retirement income and mean spending more years working to cover the loss.
In fact, savers who do not get the best deal from charges and annuities could end up working into their early 70s, a report for the National Association of Pension Funds (NAPF) by the Pensions Policy Institute (PPI) has found.
Charges for stakeholder pensions - a common type of workplace pension - are capped by law at 1.5% for the first ten years, then 1% thereafter.
But by an employer negotiating a pension with the long-term 0.3% rate offered by some major providers, a saver could increase their income in retirement by 17%.
People who are stuck with the higher charges would need to work three years longer to get the same pension as those who benefited from a pension with charges of 0.3%.
The report also showed that converting a pension pot into an income using the lowest rate quoted on open market tables rather than the 'best buy' could reduce pension income by 12%.
To make up for this loss people would have to retire two years later than if they had picked the best rate. Unfortunately, around a third of people fail to shop around for the best annuity.
"People are not powerless when it comes to their pension. By making the right moves they can get a lot more for their money without having to pay any more in," said Joanne Segars, NAPF chief executive.
"High charges can eat away at a savings pot and both workers and employers should try to keep them down. The annuity system can seem complicated but savers can help themselves by shopping around to get the best possible annuity rate.
"People who don't get the best out of their pension could end up stuck at work for years longer than they planned. Getting a good deal on charges and annuities can mean the difference between enjoying retirement and spending years more at the desk."
Earlier this week, NAPF and the PPI called the existing annuity system 'bewildering' and 'unfair', and called on the Government and the retirement industry to work together to make the market fairer.
Research found that people are not getting sufficient annuity advice on how best to choose an annuity, despite it being one of the most important financial decisions people make during their lifetime.
Often, people get nothing more than a leaflet pointing them to a website with a postcode-based search engine.
There is also a widespread lack of knowledge about different annuity options, such as enhanced annuity products designed to maximise income for people with health problems.
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