Annuity rates have hit an all-time low, having almost halved in the past 15 years, according to Moneyfacts.
Its research shows that after holding their own during the summer, rates have fallen steadily over the past two months.
The average rate for a male aged 65 purchasing a level annuity without a guarantee with a £10,000 pension pot has fallen by 3.3 per cent since September while the equivalent female annuity is down by 3.6 per cent.
The average male annuity rate is down by 10.8 per cent from a year ago while female rates haven fallen by 11 per cent.
Over the past 15 years, male annuity rates have fallen by 45 per cent while female rates are now 42 per cent lower.
Investment, life and pensions editor Richard Eagling says: “Given the stockmarket recovery has boosted the size of many pension pots, it is disappointing that falling annuity rates have had an adverse impact on the retirement income that can be achieved.
“With few signs that the recent spate of annuity price reductions is at an end, the priority must be to maximise the amount of retirement income received. For most consumers, this will only be achieved by shopping around to obtain the best price for their annuity.
“The difference between the highest and lowest standard annuity rates can be as much as 13 per cent. The potential uplift for those in ill health is even higher.”