The difference between the best and worst annuity in the open market could pay an extra £13,240 in income or £662 a year over a typical 20-year period, according to Canada Life.

Average annuity rates climbed to 7.25% for a 65-year-old in September, up from 7.11% in June, according to the Standard Life Annuity Rate Tracker.

Standard Life has re-entered the annuity market as annuity rates rise and demand for annuities surges.

Canada Life has reported doubled annuity sales compared to last year, according to its UK half year financial results.

Single pensioners need £257,000 more than couples to achieve a comfortable living standard in retirement, according to analysis by Standard Life, part of the Phoenix Group.

Annuity and retirement specialist Just Group has reported a 154% jump in first-half profits boosted by bumper annuity sales and higher new business income.

Legal & General said its operating profit for the first half of the year was £941m, boosted by its bulk annuity business.

The break-even point for retirees to get their money back from an annuity investment has fallen by five years as rates rise, according to Canada Life.

Annuity rates have climbed again meaning a 65-year-old with a £100,000 pension pot should be able to buy an annuity income of up to £7,144 per year, up from £7,027 two weeks ago and an increase of 20% on the same period last year.

Annuities have hit their highest level since December, according to new data.