People who opted out of the state second pension (S2P) and paid money into a personal scheme may have lost out, the City watchdog has warned.
The FSA said it would look into allegations of mis-selling
The Financial Services Authority (FSA) said that "contracted out" savers were headed for a pension on average £4 a week smaller than those who stayed put.
Three million people have chosen to pay cash into their personal pension rather than the S2P, or its predecessor SERPS.
Contracting out was widely seen as a way of boosting retirement wealth.
There has been growing concern that people had been wrongly advised by financial advisers to contract out of the S2P and SERPS.
Last year, Norwich Union, the UK's biggest insurer, advised its pension savers to opt back into the S2P scheme.
The FSA investigation found that a lot depended on when individuals had opted out, how long they were contracted out for, their age, and the performance and charges of the personal pension scheme they then chose.
Those that contracted out in 1988, the first year it was possible to do so, are now looking at a pension that would be on average £4 smaller than if they had chosen to remain in SERPS, the FSA said.
SERPS became the S2P in 2002.
But people who contracted out for a five year period and then opted back in would on average be about £2 a week worse off.
The FSA added that the saving and payment situation for pension savers may change over time.
As for claims that some people had been badly advised to contract out of the pension schemes, the FSA said that it would look to see if mis-selling had occurred.
However, the watchdog add that relatively few complaints about mis-selling had been made to the Financial Ombudsman Service (FOS).
Make a choice
Around three million people are currently contracted out of the S2P. An estimated eight million people have at been contracted out of S2P or SERPS at some point in their working lives.
Every employee builds up an entitlement to a second tier of state pension benefits, on top of their basic state pension, through the S2P and previously SERPS.
Employees are allowed to opt out of the S2P, a process known as contracting out.
People who contract out still pay the same rate of National Insurance, but a portion of their NI payments, known as a rebate, is paid over to a pension firm of their choice as a lump sum each year.