Since the start of this year, the average yearly income offered to a 65-year-old with a £10,000 pension by a standard annuity pot has fallen by 5.9 per cent; for a retiree with a £50,000 pension, it has fallen by 6.4 per cent. This means that average standard annuity pension incomes have reached their lowest levels ever.

By contrast, if a 65-year-old with a £10,000 pension purchased a standard annuity in January this year, they would have received an average yearly income of £506; the same person buying an annuity today would receive an annual income of £476. A 65-year-old with a £50,000 pension would have received an annual income of £2,727, compared with £2,550 today (£177 less).

Moneyfacts’ report notes that average annual incomes offered by enhanced annuities – annuities reserved for those with shorter life expectancies – this year have been “slightly more resilient”. A 65-year-old with a £50,000 pension could receive an average yearly income of £3,055 with an enhanced annuity; someone with a £10,000 pot could receive £579.

The previous record low for annuity rates was witnessed three years ago; Moneyfacts’ report concludes that lower demand for annuities following the pension freedoms taking effect, and a sharp fall in gilt yields, have worked in tandem to reduce rates even further.

“The prospects of securing a comfortable retirement have taken a further blow with news that standard pension annuity rates have hit an all-time low,” said Richard Eagling of Moneyfacts.co.uk.

“In many cases, retirees looking for a secure income now face the unenviable position of annuitising at the lowest point in the product’s history. This is particularly unfortunate for those individuals who may have deferred making a choice until the introduction of the pension freedoms but have since decided that an annuity is still the most suitable product for them.”