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Referring to the recent Financial Services Authority (FSA) action in this area, Golder said he wondered if consumers were educated properly to respond to pension providers letters.

He said: "Unfortunately consumers, even when properly prompted, are ignoring the Open Market Option. This only emphasises the importance of utilising the expertise and market options available to an adviser to ensure consumers are best served in retirement.

"Advisers now have a distinct opportunity to provide their clients with a comprehensive analysis of their situation and develop a retirement solution that best suits the clients’ requirements. In turn hopefully the client will be educated by the process."

Golder did, however, acknowledge the limits of the OMO with elements such as a guaranteed or enhanced in-house annuity rate from the pension provider, or the size of the fund making it unprofitable.

He said: "Essentially, whilst advisers should consider the OMO option with their clients, the majority of clients are unlikely to have the skills and knowledge to understand why they should consider it and whether they should invoke it.

"Restricting their choice to a conventional annuity may not suit their needs or wants and therefore underlines the importance of seeking appropriate advice to maximise their retirement benefits."