A 65-year-old with a £100,000 pension could get themselves up to £7,430 per year from an annuity, the highest since last October, according to data from Hargreaves Lansdown.
In the last two years annuity rates have risen by more than half, according to Canada Life, giving a 65-year-old with a £100,000 annuity an extra £2,500 a year.
The difference between the best and worst annuity in the open market could pay an extra £13,240 in income or £662 a year over a typical 20-year period, according to Canada Life.
Average annuity rates climbed to 7.25% for a 65-year-old in September, up from 7.11% in June, according to the Standard Life Annuity Rate Tracker.
Annuity rates have plunged since the summer, a study has shown.
The gulf in annuity rates between the top enhanced rates and bottom standard rates is 30%, according to new figures.
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