People who failed to compared annuities in the two years since 2015 and the arrival of pension freedoms will collectively lose out lost on £765m of income over the course of their retirement.
Annuity specialist Retirement Advantage has made this forecast based on the number of people who have bought an annuity over the past two years.
Half of those - or 90,450 people - did not shop around.
Over the course of a 20 year retirement, the average annuity purchase will lose £8,460 of income simply because people did not get the best deal.
Andrew Tully, pensions technical director at Retirement Advantage, said: "Unfortunately the pension freedoms have given people a licence to lose money, as half of those buying an annuity fail to shop around and get the best deal.
"This situation has actually got worse since April 2015. Taking some simple steps at the start of the process can ensure you not only get the right annuity for your circumstances but can also make a big difference to the income you receive over the course of your retirement."
He added the issue of poor value and the lack of shopping around also extends to the drawdown market, where people take an income from their pot while it remains invested.
"While drawdown is not a one off purchase like an annuity, it is still important people look around for the right product, as you can easily find yourself caught out by high charges.
"Seeking the right professional financial advice will ensure you not only buy the right product but get the best value for your personal circumstances."
Carl Melvin, IFA at Affluent Financial Planning near Glasgow agreed, adding: "Options to shop around should be placed much more prominently on all literature to sent to policyholders."
Nathan Long, senior pension analyst at Hargreaves Lansdown, pointed out pension freedoms have seen a big jump in the size of the pension pots being used to buy an annuity, but the number of people shopping around for the best rate remains miserably low.
"Failure to shop around is even more severe today than in the past as more and more sophisticated underwriting means around six in 10 retirees can benefit from an improved annuity," he said.
"Unfortunately recent attempts by the regulator to improve the numbers shopping around at retirement look set to fall flat as the remedies miss the potential for lifestyle or health to improve rates."
The Financial Conduct Authority is pressing ahead with rules which will force pension providers to direct consumers to an annuity comparison tool.
The regulator on 26 May published a policy statement on information prompts in the annuity market.
As part of the changes all providers will have to include information prompts which direct consumers to the Money Advice Services’ annuity comparison tool to increase shopping around.
These prompts should also include the amount used to purchase the proposed annuity, whether the annuity is single or joint life, whether the payment is in advance or in arrears of the start date and whether the income will increase in line with inflation.
It should also include whether the income paid by the annuity is guaranteed for any period along with the provider’s own quote.
Following a consultation the FCA has also decided to require the inclusion of a “clear and prominent” warning about enhanced annuities.
