A pension mistake could see more than £14,000 striped from older Britons’ retirement savings.

Pensioners can bulk up their savings using annuities – retirement plans that convert savings into annual income.

In their base, lifetime form, they guarantee income for life, but there are multiple types that come with different terms.

The decision to purchase an annuity is usually irreversible, so customers need to carefully consider their options before they make the plunge.

Making the wrong choice can prove costly, given the sheer amount of money they need to deposit.

Annuity services are usually provided depending on the amount of money deposited, with rates based on each round of £100,000 invested.

One round of £100,000 on a five percent rate will grant people £5,000 for every six-figure sum.

The rate would mean that people who invest less, around £50,000 for example, receive a reduced £2,500.

But data from Hargreaves Lansdown reported by The Sun shows that the amount people receive can differ massively depending on the provider, with payouts ranging from £6,532 to £7,255.

Over 20 years that seemingly insignificant £723 difference can leave Britons with a massive shortfall compared to others.

Those on plans that offer lower rates would end up receiving approximately £14,460 less.

Helen Morrissey, the head of retirement analysis at the financial financial services firm, said the findings highlight the importance of shopping around before settling on a policy.

She said: “With these kinds of figures in the mix, you don’t want to take the chance that your provider happens to offer the best rate – it’s well worth taking the time to check what else is out there.”

People should also check whether an annuity is the best choice for them in the first place, as investment experts have long warned that they come with high fees compared to other options like mutual funds.

While they can be customised to meet independent needs, people must ensure they pay more to receive comparatively small payments in the long run.