Annuity rates have hit their highest point in eight years, with a further surge in annuity income expected if the Bank of England raises interest rates today, according to a new report.

Annuity rates, after falling for many years, have been on an upward trend in the past year.

A client with a £100,000 pension could get £5,940 per year from an annuity, according to the report from Hargreaves Lansdown. The last time rates were this high was August 2014.

In the aftermath of the Brexit vote in 2016, someone with £100,000 could secure an annuity income of only £4,495 per year.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “After ruling the retirement market for many years annuities fell out of favour with the advent of freedom and choice as people embraced more flexible options such as income drawdown. However, the higher incomes available now could prompt more people to take a closer look.

“The major criticism of annuities is around their flexibility. Once bought an annuity cannot be unwound and so people feel they miss out on the potential for higher rates later. However, there is no obligation to annuitise your whole pension on one day, you can annuitise in stages throughout your retirement. This enables you to secure a level of guaranteed income to secure your needs while leaving the remainder invested. It also means you can benefit from better rates as you age.”

The Bank of England’s Monetary Policy Committee is meeting today for its monthly review of the base rate. Rates are expected to rise again by between 0.1% and 0.5% as the Bank looks to battle rising inflation.

Recent rises in CPI inflation to a 30-year high of 9% have put more pressure on the Bank to keep inflation under control.