Almost half of over 50s don’t know that annuities come in many forms and with various options, according to research from Standard Life, part of Phoenix Group.

In the last two years annuity rates have risen by more than half, according to Canada Life, giving a 65-year-old with a £100,000 annuity an extra £2,500 a year.

The top open market annuity could pay £662 more a year over a typical 20-year period than the worst-paying, 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.