The FCA found retirees have been losing out by an average of £1,500, with
eight out of ten people missing a significantly more generous retirement income by shopping around and buying an annuity from a different provider.
The review called the market 'disorderly' and the FCA has launched a deeper competition probe.
A range of commentators and firms have backed the findings.
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Sue Lewis, FSCP chair, backed the findings and said: "People only have one chance to make the right choice when buying an annuity.
"The decision is harder to make when the market doesn't work, and the FCA has shown that it doesn't.
"The issue of small pots also needs attention, given the poor deal those with the smallest amount of savings get. This goes beyond regulation: Government has a role to play here too."
The FSCP published its own report in December on the annuities sector, calling for Government to step in.
It stated: "The chances of mass consumer detriment are, in our judgement, too high to trust to current market-driven solutions alone: hence our recommendations for further regulatory and government-led structural reform."
The panel welcomed the full market study but said the FCA should act immediately to introduce a robust code of conduct for firms selling annuities on a non-advised basis.
Ms Lewis said: "The panel recommended a code of conduct for non-advice websites and introducers, we would like to see this introduced without delay."