The gap between the best and worst annuity rates is widening, according to new analysis.

The difference has risen from 31.3% in December 2013 up to 34.93% in July, according to Hargreaves Lansdown.

The firm examined the latest annuity market data published by the ABI last week.
On a typical annuity purchase value of £21,000, over a 20 year retirement this equates to £7,162 of lost income, researchers found.
Hargreaves Lansdown looked at the distribution of the rates, to see how many companies are offering terms which were, if not the best, at least somewhere close to the best rates of the market. It said this was a good indication of how competitive the market is.

{desktop}{/desktop}{mobile}{/mobile}

Taking a cut-off point of 10% below the best rates on the market, it turned out that on average more than half of companies were offering rates below this 'good value' threshold.
On average only around one third were offering their customers something close to what the firm called "competitive terms".
Tom McPhail, head of pensions research at Hargreaves Lansdown, said: "It is painfully obvious that some companies are making no effort to offer their customers decent value.
"For investors who do shop around, competitive rates are available; unfortunately we also know that in spite of the recent budget reforms, investors are still being rolled over into their existing provider's annuity.
"What's more, many pension providers are failing to offer investors a low cost alternative to annuities, such as a drawdown plan."