Altmann said the practice of providers converting savings into an annuity income for customers, then keeping the proceeds should contact with the customer be lost, should be “banned immediately”.

The income is often kept in a holding account until a policyholder gets in touch, but the provider will keep the cash if no claim is made. Descendants, though entitled to claim a relative’s pension savings, cannot do so for annuity proceeds, Altmann said.

“If there was no automatic annuity purchase the customer could always come along later and take their money out,” Altmann, quoted in the Telegraph, said.

“But once the annuity is bought they can’t undo it in future. In light of the Chancellor’s Budget changes I believe these automatic annuities should be banned immediately.”

Altmann said automatic annuity purchases are written into the terms of some pension contracts, which specify it will usually happen on the date at which a policyholder expects to retire.

But she said the customer can prevent the purchase by contacting the company beforehand and requesting another course of action, such as keeping the policy going or transferring to another provider.

“However, if the company has lost touch with the customer, who may have changed their address, it will go ahead with the annuity purchase,” said Altmann.