Despite the significant improvement in annuity rates over the past 18 months, only 14% of 50+ year olds who are at least fairly familiar with annuities consider them to currently offer a good rate.

In fact, 50+ year olds are more likely to say that annuities currently offer a poor rate of return compared to the long-term trend that they offer a good rate of return (21% vs 14% respectively) with just 3% considering them to offer a very good rate currently.

Canada Life research revealed that just over half of 50+ year olds (53%) consider an annuity rate of anything above 4% ‘good’.

Meanwhile a quarter (26%) will only consider annuity rates ‘good’ once they reach higher than 7%. Two in five (43%) over 50s say they don’t know if annuities offer a good or poor rate of return.

Currently a benchmark annuity for someone aged 65, with no pre-existing health or lifestyle conditions, would pay in the region of 7%, according to the company.

Nick Flynn, retirement income director at Canada Life said: "Annuities have been on a roll with rates increasing significantly over the past 18 months, at one point up by nearly 50%. This is a remarkable shift in fortune in a very short space of time."

He said consumers have not yet caught up with the rapid rate improvements.

 Research was conducted among 2,000 UK adults, of which a representative sample of 955 were aged 50 and over, with 383 of those aged 50+ at least fairly aware of annuities - fieldwork conducted by Opinium between 28 April 2023 and 2 May 2023.