Pension firms will be forced to reveal to customers if they are offering rip-off retirement deals , the financial watchdog announced yesterday . Companies will have to advertise what rival firms are offering and how much more retirees could earn if they switched to a different provider . They will have to do this every time they send a customer a quote for an annuity – when a pension pot is turned into a fixed income for life . The Financial Conduct Authority ( FCA ) said that using a ‘ simple quote comparison ’ would expose bad-value contracts . Under new rules to be introduced in the UK next year , firms will have to advertise what deals rival firms are offering and how much more retirees could earn if they switched to a different provider ( file picture , posed ) In a victory for Money Mail , the radical shake-up will force firms to ‘ make it clear to consumers how their quote compares relative to other providers ’ . The FCA said this would ‘ prompt customers to consider the benefits of shopping around and switching ’ . From next month , pensioners will no longer have to buy an annuity with their pension pot and can withdraw all or part of it . However , many are expected to still opt for one because they want the security of a fixed income during retirement . FCA director Christopher Woolard said : ‘ The retirement income market is set for the biggest change in a generation . We want to ensure it is fit for purpose. ’ Experts said the new rules – to be introduced next year – will prevent swathes of pensioners blindly accepting a poor-value annuity offered by their pension provider . Andrew Tully , of retirement firm MGM Advantage , said : ‘ Pensioners are locked into poor-value annuities because they are not encouraged to shop around . If providing details of what rivals are offering provokes someone to look at alternatives , that has got to be positive. ’ The Financial Conduct Authority ( FCA ) said that using a ‘ simple quote comparison ’ would expose bad-value contracts and the new regulations would ‘ prompt customers to consider the benefits of shopping around ' Other measures unveiled by the FCA includes cutting back on jargon-filled documents – in some cases as long as 22 pages – an issue Money Mail has highlighted . The watchdog said it would also consider whether savers should be sent a simple statement outlining how much money they have saved and what type of pension they have . Known as a pension passport , it would make it easier to switch to a better deal . Since Money Mail campaigned on the issue it has won the backing of pensions minister Steve Webb . The Treasury is now conducting trials at several pension companies before the regulator considers making it compulsory .
rival firms would be forced to reveal offers by rival firms under new rules . Firms forced to ‘ make it clear to consumers how their quote offers ’ FCA said it would help ' customers consider benefits of turning around ’