Some people are getting lower annuities for the same pension pot due to changes in longevity, the Financial Services Authority (FSA) has announced.

FSA press officer Robin Gordon-Walker said "Broadly speaking, if on average people are going to live another ten years, then they can get ten per cent of their pension pot and then the insurer's in balance.

"Some people will only live for three and some people will live for twenty. If the average goes up to twenty, then they can only pay five per cent. That's why some people are getting lower annuity for the same 'pot'," he said.

An annuity is an income for life provided by and insurance company in return for a lump sum or pension fund. The size of the income paid out is relative to the size of the lump sum.

Consumers can currently buy an annuity at any age from 50 - 75, although government regulations will see the age rise to 55 from 2010.

The FSA is an independent body that regulates financial services in the UK