The gap between the best and worst paying annuities has increased in recent weeks, mirroring the rise in bond yields, Just Group has noted.

The retirement specialist’s latest research found that an annuity buyer aged 70 would secure almost 20% more income by choosing the best deal over the worst, equating to £7,400 more income every 10 years from a £50,000 pension fund.

The gap at 65 years old is 13%, adding up to £4,380 more income over 10 years from the same pension fund.

Just Group said that this gap has been "trending higher for more than a year", but reached a peak in recent weeks.

It added that this reinforces the need for anyone considering annuities, and particularly older buyers, to ensure they "shop around for the most competitive deal", potentially "adding thousands" to their incomes over retirement.

Group communications director at Just Group, Stephen Lowe, stated that it was likely that providers of guaranteed income for life (GIfL) solutions were "responding to movements in market rates".

He concluded: "GIfL pricing is influenced by the returns on gilts and bonds which have been moving up recently. It’s a competitive market and annuity providers will be watching the changes, with some responding more quickly than others depending on commercial considerations.

"Current annuity rates are attracting a lot of interest from retirees wanting guaranteed income but it is unlikely your own provider will pay the most. Avoiding inferior rates requires disclosing health and lifestyle information that could push the rate higher and then shopping around for the best deal."

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