Pension experts have expressed fears that reforms announced in the Budget will lead retirees to 'burn through' their money too fast.
Chancellor George Osborne's changes to pensions were described as radical.
He told Parliament: "Pensioners will have complete freedom to draw down as much as they want, when they want. No one will have to buy an annuity."
John Ball, UK head of pensions at Towers Watson, said: "Of those who choose not to buy annuities, many may enjoy better outcomes, but some will burn through their money too quickly and others will be too cautious about how much of their savings they allow themselves to withdraw and spend.
"Defined contribution (DC) pensions won't always be pensions any more – they won't have to provide a regular income throughout retirement."
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He also expressed concerns about the impact on the UK life insurance industry and related sectors.
He said: "The immediate reaction in the market has been to mark down the values of several insurance companies quite significantly, and it does seem clear that the future flow of new annuity business may well reduce.
"But there are other areas where the insurance companies may benefit, for instance as providers in the pension accumulation (including auto-enrolment) space as well as managing drawdown propositions where the new tax regime could make such propositions attractive."
Michael Ward, managing director of consumer comparison website www.PayingTooMuch.com, which compares 13 annuity providers for consumers said: "If an annuity does not get purchased at retirement, our worry is that even the most sensible person will be tempted to spend more of their pension cash than they planned.
"And as they will have no guaranteed income for life which an annuity does provide, we could see a generation relying on benefits after their pots have run dry."
John Perks, managing director at LV= Retirement Solutions, said: "We believe that annuities will continue to have a place within the new retirement income landscape as many clients want the certainty and guaranteed income that these products provide. However we anticipate that other options will now be given more consideration."
