According to a new report, the poor value of annuities is affecting earnings of pensioners in the UK and they are losing thousands of pounds each year.

The Financial Conduct Authority (FCA) said in a new report that annuities market is performing poorly for the savers in the country. The regulator has said that it will launch an investigation into competition in the sector. Annuities are an insurance contract that pays out a set income until death and these are purchased with pension on the person's retirement.

The savers are losing out money by not having the option to shop around for the best annuity and accept the one saver by their insurers for them. The experts in the industry are calling for open market option (OMO) for the pensioners in the country. Under a new plan proposed by thepension minister, the retired workers in the UK might be able to switch between new pension schemes in an effort to address malpractices among insurance firms.

The pension minister has said retired workers might be able to choose between new pension schemes just like they can for mortgage schemes under the new reforms. Steve Webb has said that he is aiming to scrap the current situation where retired workers are trapped in potentially poor-value schemes and they do not have the option to change schemes.

The plan comes after an advisory panel said that retired works are often forced to stay with poorly structured schemes in the UK's complex £12 billion annuities market.