Annuity rates have gone up 19 per cent since they dropped following the European Union referendum, according to data from Hargreaves Lansdown.
Two years ago a £100,000 pension would have bought a person aged 65 a single-life, non-increasing annuity income of £4,495 but today it would get £5,341, the investment firm stated.
Before the referendum in 2016, the annuity rates for people aged 65, 70 and 75 was 3.6 per cent, 1.92 per cent and minus 0.08 per cent respectively.
For each of those age groups, the annuity rates have since increased to 18.83 per cent, 14.87 per cent and 10.1 per cent respectively.
Although annuity rates have increased, the uptake is still low at 33,975 this year in comparison with 36,891 during 2017 and 37,172 in April 2015 when the pension freedoms were implemented.
Annuity sales suffered a big hit after the chancellor announced in 2014 no one will be forced to buy one anymore for their retirement.
Nathan Long, senior pensions analyst at Hargreaves Lansdown, said: "Annuity rates suffered a huge drop in the immediate aftermath of the referendum result as gilt yields fell.
"With annuity rates having risen 19 per cent since bottoming out two years ago and the average managed pension fund rising 15 per cent, now is a great time to revisit whether buying an annuity is sensible."
According to Hargreaves Lansdown, the number of providers in the market has shrunk to six in the past two years, including Scottish Widows; Aviva; Legal and General (L&G); Just; Canada Life and Hodge Lifetime.
While it is unlikely that annuity rates will increase on a large scale, there could be an effect on the market should the Bank of England decide to make dramatic changes to rates after Brexit, Mr Long has said.
"The number of providers has shrunk to just six, but those that are left are providing competitive rates and there’ is plenty of opportunity to begin de-risking clients' retirements by securing small tranches of annuity from a larger drawdown pot," Mr Long said.
"The optimum price point for most providers is around £40,000 to £60,000 pounds. If interest rates continue to recover slowly as anticipated, we are unlikely to see any big change in annuity rates, although any dramatic interest rate response by the Bank of England in the wake of leaving the EU could muddy the waters."