Enhanced annuities are a popular choice for retirees with health problems, as they pay out higher sums due to certain illnesses or lifestyle habits.

But according to the Telegraph newspaper, many people buying these annuities are missing out on tens of thousands of pounds in retirement because they have failed to shop around.

The newspaper quotes statistics which show that the difference between the best and worst enhanced annuity quotes can be as much as 30 per cent.

This equates to around £30,000 in income over ten years.

To be sure of securing the best possible rate, it's important to scour the whole market and get quotes from as many annuity providers as possible, experts claim.

Ros Altmann, director general of Saga, said: "These buyers are already ill, and they think they have done the right thing if they ask their pension company for an enhanced rate.

"But it turns out that they could be thousands of pounds a year worse off than they need have been."