Just Retirement and Retirement Advantage have today cut annuity rates by 2% and 3% respectively.

Tom McPhail, head of retirement policy at Hargreaves Lansdown, said: “Gilt yields and annuity rates have been dropping steadily over the past year. The events of the past couple of days have given momentum to that trend.

“For any investor planning to buy an annuity in the immediate future, it makes sense to do sooner rather than later.”

The terms of a quote from an annuity company are usually guaranteed for between two and four weeks.

Andrew Tully, pensions technical director at Retirement Advantage, said the firm reduced rates as markets adjust to the UK leaving the EU.

“Customers with existing annuities in payment are of course unaffected. Customers in the process of buying an annuity have a 14-day guarantee period which protects the rate offered,” he said.

McPhail said those wanting to delay purchasing an annuity but who need to draw on pension savings should look at drawing an income from funds using a drawdown arrangement.

For annuity buyers, the message is to shop around for the most competitive terms.