Standard annuity rates have fallen to their lowest levels since November 2012, with the pace of decline increasing since the turn of the year, according to data published by Moneyfacts.
The rate payable for an average single-life standard annuity for a 65 year old with a £10,000 pot has fallen by 5.9 per cent in 2015.
The speed of decline in rates is more than double the shrinkage noted between Q3 and Q4, where rates fell by 2.8 per cent.
Similarly, if the same saver had a pot of £50,000, the rates they could have received have fallen by 6.4 per cent since the start of 2015, having previously dropped 2.5 per cent between Q3 and Q4 2014.
Average payouts for those with a £50,000 pot have now fallen from £2,727 to £2,550 since the start of the year.
Moneyfacts head of pensions Richard Eagling says: “The prospects of securing a comfortable retirement have taken a further blow with news that standard pension annuity rates have hit an all-time low. In many cases, retirees looking for a secure income now face the unenviable position of annuitising at the lowest point in the product’s history.
“This is particularly unfortunate for those individuals who may have deferred making a choice until the introduction of the pension freedoms but have since decided that an annuity is still the most suitable product for them.
“Could we be about to see a wave of new annuity business hitting the market at a time of record low rates in the same way that many individuals rushed to annuities before the introduction of gender neutral pricing, only to unwittingly fix their incomes in at the previous all-time lows?”
Enhanced annuities show a similar trend, with average single-life rates for a 65 year old with a £10k pot falling 5.3 per cent this year, while a £50k pot has seen average rates fall 6 per cent.