Retirees are being stung with high costs for their allocated pensions, leaving them with less income in retirement.
The most expensive can be more than five times the costs of the cheapest, a review of 66 account-based pensions by researcher Canstar finds.
Canstar's research finds the most expensive allocated pension among the 66 reviewed costs $15,727 a year compared with the cheapest at $2,875.
Allocated pensions, also known as account-based pensions, are offered by superannuation providers. They are started with a lump sum from a super fund.
There is usually no tax paid on investment earnings or on pension payments from age 60, but they come with fees such as member fees, administration fees and investment management fees.
While investors cannot control returns from investment markets, they can control the fees and costs they pay.
Getting costs down has never been more important for hard-hit retirees.
Record-low interest rates means retirees can only earn about 2.5 per cent from safe investment like term deposits.
And the Abbott government confirmed in last week's budget the assets test for the age pension will be tightened. If the change becomes law, from January 2017 better-off retirees will no longer receive a part pension.
