Its thematic review into the market investigated the failing open market option as well as other facets of the annuity space, including the burgeoning comparison website market.

The FCA looked at 13 annuity price comparison websites. The sites compare different annuity rates and allow people to buy a contract direct from a provider.

However, the regulator said there was lack of clear information and an “underplaying of the significance of buying an annuity”.

The watchdog said: “Given the significance of buying an annuity, the FCA expected these websites to make it unavoidably clear that the decision to buy an annuity cannot be reversed.

“The FCA also wanted to see that information about the services offered by firms was clear, and any associated costs were prominently disclosed, and that these websites were not inadvertently giving financial advice by giving recommendations. All of the sites raised concerns and all but one were giving information that FCA believes was not fair or clear, and was misleading.”

The regulator said it has already required the firms running these sites to make changes.

“This means it is already easier and clearer for people to shop around if they choose to buy direct, especially those with smaller pension pots that cannot afford, or do not want to pay for, financial advice.”