Annuity rates are at historically low levels and there are considerable downward pressures that are likely to reduce rates further. A European directive banning gender discrimination when pricing annuities will see male annuity rates fall from December 2012.
Following this, Solvency II, which is a directive to ensure all EU-based annuity providers have sufficient capital adequacy will further reduce annuity rates from 1 January 2014.
With regard to your own pensions, typically combining four smaller funds, assuming there are none with guaranteed annuity rates or guaranteed minimum pensions, into a single annuity will improve your annuity rate.
However, there is a tipping point where the annuity rate will actually start to decline. This amount is typically between £250,000 and £500,000, depending on the annuity provider, because of the increased liability faced by the provider.
It's often sensible to take the allowable tax-free lump sums from your pensions. This gives you more flexibility in terms of how you generate income and has tax advantages, over a pension annuity, if you simply use this money to purchase an annuity with the proceeds.
Drawdown is a useful tool for deferring taking an annuity but seek independent advice before proceeding.