The Financial Conduct Authority (FCA) said the firm offered call handlers large financial incentives to sell annuities, which meant they may not have acted in customers’ best interests.

According to Standard Life, 80,000 customers could potentially have been given inadequate information about the right annuity product for their circumstances.

The company said it has written to affected customers and expects to compensate up to 35 per cent of them by the end of the year.

The calls under review took place between 1 July 2008 and 31 May 2016.

During the period, nearly 22 per cent of call handlers received more than 100 per cent of their basic salary in bonus payments.

Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Standard Life Assurance Limited’s controls needed to place fairness to customers at their heart.

“Here, the financial incentives available to staff for selling non-advised annuities by telephone created conflicts which led to unfair outcomes for some customers. Firms must have controls in place to ensure they are prioritising fairness to customers.”

Standard Life Assurance was bought by the Phoenix Group in 2018.

In a statement, Susan McInnes, chief executive of Standard Life Assurance, said: “While this is an historic issue and one we were aware of when we acquired Standard Life Assurance Limited, we would like to apologise to affected customers, all of whom we have already been in contact with as part of the programme of customer redress.

“We have also reviewed and updated our telephone practices as part of this process.”