Why it pays to be in poor health in retirement

Annuity rates are in free fall, which is bad news for anyone who wants to buy a guaranteed income at retirement.

The average rate has dropped by 18 per cent in the past year, and by 27 per cent over the past five years, according to figures from Retirement Advantage. Or, put another way: someone with a £50,000 pension could have bought an average annual annuity income of £3,270 five years ago, £2,895 a year ago, and just £2,375 today, suggesting that 2016 will be the worst ever year for annuity rates.

Rates are also unlikely to pick up any time soon, what with the economic uncertainty around Brexit and our longer life expectancy. A man aged 65 can expect to live a further 21 years, until the age of 86. Life expectancy is longer for a woman, at 24 years, taking her to the ripe old age of 89. Remember, these are just averages.