Annuity rates have reached an 18-year high of 7.75%, according to the Standard Life Annuity Rate Tracker.

Today’s competitive annuity rates mean the payback period is now 14 years on a benchmark £100,000 annuity purchased by a 65-year-old, generating an income of £7,373 a year.

A third (33%) of annuity buyers failed to compare rates from two or more providers before purchasing, according to a new report.

The turmoil in the bond markets has caused annuity incomes to soar by almost 50% in the last three years, new data shows.

Average annuity rates for a healthy 65-year-old have increased by around 2.5% since January, according to the latest Standard Life Annuity Rate Tracker.

Annuity rates have increased by 8% for a healthy 65-year old over the last 12 months, according to new data.