While bond volatility might have some investors worried, purchasers of annuities are likely to benefit as yields reach three-year peaks. Annuities are mostly invested in government bonds, so bond yields and annuity rates closely correlate.

Tom McPhail, head of pensions research at Hargreaves Lansdown, says it might be worth investors starting to lock in rates at this level. "Annuity rates have been on a steady downturn since 1990 but turned a corner in November last year and are now at the highest since 2004." According to William Burrows Annuities, the purchase of a £100,000 joint life annuity in November 2006 - a recent low point for annuity rates - would generate an annual income of £5,982. This month, the same annuity would provide £6,289 per year.