Annuity rates are at an all-time low, serving another blow to the prospects of securing a comfortable retirement, according to Life and Pensions Moneyfacts.
Research has found that annuity rates have been falling steadily over the summer, following a period of re-pricing by providers.
The average annuity rate for a 65 year old male purchasing a level without guarantee annuity, based on a purchase price of £10,000, has shrunk 6.3 per cent since last August; the equivalent annuity for a female has fallen by 5.6 per cent in the same period.
Including these recent reductions, the last 15 years have seen the average male annuity fall by 45.5 per cent and the average female annuity by 41.8 per cent.
Commenting on the findings of the research, Richard Eagling, editor of Investment Life & Pensions Moneyfacts, said that the outlook for those approaching retirement "appears bleaker" with ever month that passes.
"In a few months time the first baby boomers will hit retirement. Often perceived as the lucky generation, they are likely to face a rude awakening when they come to secure their retirement income via an annuity.
"With gilt yields still low and life expectancy increasing we can expect annuity rates to fall further still. Tomorrow's pensioners face a desperate battle to secure a comfortable retirement."
© Fair Investment Company Ltd
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