The analysis by Key Retirement Solutions found a 65-year-old with a median pension fund of £25,000 could expect an annual income of £1,420 now rising to £1,499 if they delayed to the age of 67.
However they would miss out on income of £2,840 for the two years that they have delayed and would have to live another 36 years to earn that money back.
Dean Mirfin, group director at Key Retirement Solutions, said: “With annuity rates at all-time lows it can seem sensible to delay to avoid locking in an income at the low point.
“But it’s a luxury very few can afford and a strategy that may not pay off. Not only do you have to go without the income but you also have to hope rates rocket and/or your health deteriorates, and if neither happens then you will have to live up to 36 years just to earn back the lost income.”
Currently around 500,000 annuities are bought a year and that figure is forecast to rise to 850,000 within two years as the numbers retiring increase, Key says.
