Retirees waiting until later in life to purchase annuities are most at risk of missing out on extra lifetime income by failing to shop around, Just Group has found.

The group revealed that for a healthy 75-year-old, the difference between the best and worst annuity income was 17%.

The best-worst gap for those 70 years old was 14% and 11% for someone aged 65.

In cash terms, a healthy 75-year-old buying an annuity with a £50,000 pension could expect about £4,661 income each year for the rest of their life from the most competitive provider, compared to £3,980 from the least competitive, a difference of £681.

This figure has been as high as 22% in the past year.

Group communications director at Just Group, Stephen Lowe, said: "Improving returns have pushed up demand for annuities in recent months but buyers must do their homework to avoid the poor value providers and to secure the highest income possible. It means extra money every month for as long as you live.

"Annuities provide secure income so people have peace of mind knowing that they can spend what they receive without worrying if it will fluctuate or disappear during their lifetime.

"But there are no second chances when you buy annuity – you must get it right first time. That means disclosing health and lifestyle information so that the rate offered is personalised to your circumstances, then taking that information into the open market to see which providers are the most competitive. The better the deal, the more income you will enjoy for the rest of your life."

Just Group's figures follow on from research by the Financial Conduct Authority last year, which found that half (50%) of annuity buyers did not compare rates to find the best provider and more than half (52%) did not know disclosing poor health could result in higher rates.

Lowe added: "These high numbers raise concerns about the level of support retirees are receiving – this is the closest thing in the financial world to being given free money."

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