Ignorance over pension annuities is putting retirement income at risk for millions of Brits.
The findings, revealed in Aviva's Real Retirement Report, show that more than 8.5 million over 55s demonstrate a worrying level of ignorance over annuities.
The Report shows that almost two thirds of over 65 couples fail to take out a joint annuity, while two thirds are unaware of the fact that being overweight or a smoker increases annuity payouts.
According to the Aviva data, the average retiree's pension pot is £27,207, while women have saved 26 per cent less than men. As a result, the average income a woman derives from her annuity is £99 per month, while the average man takes £151.
When it comes to joint annuities, only 29 per cent of married people under the age of 65 take out a joint annuity, while this increases to 41 per cent for married couples over the age of 65.
Meanwhile, it is thought that 40 per cent of people could benefit from taking out an impaired or enhanced annuity – available to people who have illnesses or health conditions.
However, the research found that most retirees and pre-retirees choose standard annuities because they are not aware that health conditions could improve their annuity income.
Commenting, Darren Dicks, head of annuity propositions at Aviva Life said: "With legislation making it compulsory to purchase an annuity before the age of 75, it is worrying that people over 55 know so little about them.
"This lack of knowledge could see some people settling for a far lower income than they are entitled to or others finding that their income dries up all together when their partner dies."
© Fair Investment Company Ltd