Overall annuity rates have fallen by 14% in three years, and conventional rates have dropped more than 2% since March.
The figures, from provider MGM Advantage, also show that enhanced annuity rates, which are sold to pensioners with long-term illness or those who smoke, for a pension pot worth £50,000 are down 2.29% since March.
Three rounds of quantitative easing (QE), volatile stockmarkets and rock-bottom gilt rates are behind the fall in annuity rates.
Aston Goodey, distribution and marketing director at MGM Advantage, says that as rates are "unlikely" to bounce back in the near future, buying an annuity today could be the best option.
He says that QE has had an adverse impact on annuity rates, adding that the forthcoming EU gender directive – which will prohibit insurance providers from discriminating between men and women – will mean annuity rates could fall further.
In addition, MGM found there is a widening gulf between the best standard annuities and the worst. Women could benefit from an extra £8,480 over their retirement if they chose a top-quartile rate, while men could pocket an extra £6,528 by shopping around on the open market.
Looking at the market as a whole, the figures show that the difference in income between the top enhanced rates and the bottom conventional rates stands at 43% for men, and a higher 46% for women.
Essentially, that means a 65-year old female that qualified for an enhanced annuity could take home an income of £3,218 a year, compared to just £2,704 if she were to buy a conventional annuity. MGM estimates that by choosing an enhanced annuity, both women and men could benefit from more than £10,000 and £8,500 worth of income respectively over the course of an average retirement.
This article was written for our sister website Money Observer