Lifetime annuity rates climbed to more than 7% in June following steady increases since the start of the year.

A 65-year-old with a £100,000 pension could earn up to £7,430 per year from an annuity, the highest since last October, according to data from Hargreaves Lansdown.

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.