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Jaw-droppingly, six out of 10 policyholders still do not shop around when their pension matures, but simply accept the annuity quotation which their existing company offers, according to data from the Association of British Insurers.

Stuart Bayliss, pensions expert at Annuity Direct, said: "This is complete madness.

Buying an annuity will dictate a person's income and therefore lifestyle for decades.

Yet most people just accept the first offer they get." Even those who do shop around are often oblivious to the existence of these specialist health policies and only a small fraction will ask for enhanced terms.

If they did, Tomorrow's research concluded, they would receive 20% more on average, which the company says would boost a typical pension pot of £25,597 by £334 annually.

However, Annuity Direct says these figures are too conservative.

Bayliss said: "Tomorrow's findings are based on raw numbers.

We sex-adjust on the grounds that men have much bigger pension pots, and typically win far more through an enhanced annuity." Whatever the potential gains, everyone agrees they are big.

Enhanced or impaired annuities are a relatively new concept, wit...

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