An interest rate increase tomorrow (Thurs) could boost annuity incomes further, despite rates already being 19% higher than this time last year.

Hargreaves Lansdown says a 65-year-old with a £100,000 pension could now generate an income of up to £6,782 per year.

That’s up from £5,691 this time last year, a rise of almost a fifth according to Hargreaves, although the figure is slightly down from rates recorded after March’s mini-Budget.

The Bank of England is due to review base rates tomorrow with many experts expecting a 25 basis point rise from 4.25% to 3.5% as efforts to curb inflation continue.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “After drifting slowly down from their post mini-Budget highs we’ve seen a modest increase in the annuity incomes on offer over the past month.

“There are no guarantees but if the Bank of England chooses to hike rates again on Thursday, then we could see these incomes boosted a bit more in the coming weeks.”

She said that while annuities may not be the retirement powerhouse they were before the advent of Pension Freedoms for anyone looking for a guaranteed income in retirement then they should be considered.

Ms Morrissey said: “For many years, the incomes available from annuities were low but over the past year we’ve seen a real revival in rates, partly because of increased interest rates. This means many more people are considering them as part of their retirement plan.”

All data generated used Hargreaves’ annuity rate calculator. Quote details: 65-year old, £100,000 pension, single life level annuity with five year guarantee.