The Financial Conduct Authority (FCA) was publishing findings from its study into the retirement income market after announcing in February that insurers failed to give customers the best deal on annuities, which provide an income for life.

Since then the market has changed dramatically after British Finance Minister George Osborne announced in his March budget plans to scrap an obligation to buy an annuity.

The FCA said its study confirmed competition was not optimal and that sales practices had contributed to consumers not shopping around for the best offer. It said "significant improvements" were needed and proposed a number of changes.

The FCA also proposed replacing an industry code on pensions with its own rules and, in the longer term, offer consumers a "pensions dashboard" that would allow them to see all their lifetime retirement savings in one place.

"The budget reforms are a game changer for the retirement income market. People will be given more choice and many will want some support to ensure they make the right decisions for them," said Christopher Woolard, FCA director of policy.

The watchdog's tone had softened since February, when it said in a review that the annuities market was disorderly, with insurers maximising profits and failing to give the best deal. The full study instead found no widespread evidence of mis-selling and said the right annuity bought on the open market with an average sized pension pot offered good value.

But the FCA said it would investigate further whether people with life-shortening medical conditions missed out on buying so-called enhanced annuities that pay out a higher income.

In November, Aviva (>> Aviva plc) said it would compensate 250 customers who had been missold annuities after a newspaper reported that savers with certain medical conditions should have been offered an increased payout by the firm.

Pensions expert Ros Altmann accused the FCA of dragging its feet. "I am struck by the lack of urgency with which the FCA is tackling the problems," she said.

"We need to stop any further mis-selling, but the FCA has still not achieved this. It's so disappointing."

Tom McPhail, head of pensions research at Hargreaves Lansdown, said the report will come as a relief to an industry still coming to grips with the biggest change in a generation -- especially as it found no widespread mis-selling and endorsed annuities as good value if customers shopped around.

About 420,000 annuities worth 14 billion pounds were sold annually in recent years.

(Additional reporting by Simon Jessop; editing by Susan Thomas and Crispian Balmer)

By Huw Jones and Simon Jessop