Annuity rates have plummeted by more than 11 per cent in less than three years, new figures show.

Typical conventional and enhanced annuity rates have fallen by 0.45 per cent and 2.48 per cent respectively in the past three months alone, according to the MGM Advantage Annuity Index.

And a 2.1 per cent drop in overall average annuity rates between December 2011 and March 2012, means that rates have fallen by 11.22 per cent since June 2009, when the index was started.

The index also reveals the difference in retirement income between the top enhanced annuity rates and bottom standard annuity rates for those aged 65-plus with a £50,000 pension pot is staggering 50.8 per cent for men and 55.4 per cent for women.

Aston Goodey, sales and marketing director at MGM Advantage, said the findings will continue to put pressure on people approaching retirement.

He added: “The outlook for annuity rates continues to remain uncertain. Yields on UK gilts and corporate bonds remain at rock bottom levels, while gender neutral pricing will see annuity rates for men fall but rise for women.”

Free pensions guide: Click here