Britain’s pension regulations need to be changed to protect retirees from poor financial decisions and ward off a wave of mis-selling cases or criminal scams, the UK’s financial watchdog said yesterday.

The Financial Conduct Authority (FCA) said it wanted to be sure insurers and other custodians of pension pots tell their customers about the full range of pension options, while restricting the promotion of high-risk investments.

Increased opportunities to choose how to access pension savings offer many benefits to consumers, yet also greater risks

Recent pension reforms mean over-55s no longer need to use their pension savings to buy an annuity, which gives a fixed income for life, but can instead either invest in other savings products or just splash the cash.

“Increased opportunities to choose how to access pension savings offer many benefits to consumers, yet also present greater risks of irreversible losses from pension fraud and scams,” the FCA said in a consultation paper.

Sales of annuities have dropped sharply and more than 200,000 Britons have accessed their pension cash since the freedoms were introduced in April, according to FCA figures.