Retirement provider Canada Life has increased its annuity rates for the 16th time this year. 

The provider’s benchmark reference annuity of £100,000 at age 65 will now pay around £6,353 income a year, compared to £4,542 for the same annuity purchased at the start of 2022. 

The increase boosts guaranteed income on a £100,000 annuity by £1,811 a year, an extra £36,220 over a 20-year period.

After many years of decline annuity rates have been creeping upwards this year, thanks mainly to increases in the base rate and gilt yields improving.

Nick Flynn, retirement income director, Canada Life, said: “Annuity rates have continued to bounce back following changes to base rate and the improvements in yields on gilts, with rates up around 40% this year. This sustained growth in potential income warrants giving annuities a second look, especially for anyone concerned about income security in retirement.

“Annuities can play a key role in retirement plans and it will always pay to shop around for not only the best rate but the right shape annuity.”