With an extra £50bn of QE announced last week in an attempt to stimulate the economy, further falls in gilt yields, which are linked to annuities, are expected.

The QE programme now stands at £375bn and income offered to those approaching retirement has fallen by 20% in the past three years, the Financial Times reports.

According to the paper, a 65-year-old man with a £100,000 pension pot could have secured an annuity income of £6,930 in March 2009 when QE was started.

However, he would now be offered only £5,850.