Women in drawdown can expect to receive 37 per cent, or £47,400, less in retirement than men, according to new research by Zurich.
The new report, Drawdown: Is it working for consumers?, found that a man retiring at 65 will have an average pot of £212,000, securing an annual income of £6,360 over 20 years, with a 3 per cent yield, while women’s average pot of £132,000 means they would generate an income of £3,990.
According to Zurich, which surveyed 750 people since pension freedoms, the £2,370 difference is part of a “new gender drawdown gap”, in which a longer life expectancy also means women’s pot have to be stretched over a greater period.
Zurich UK head of strategic partnerships Rose St Louis, said: “Women already face barriers to securing a comfortable retirement income, and it’s no longer just down to the pay gap or career breaks.
“Pension freedom has given people far greater choice in how they access and spend their retirement savings, but there are clearly unintended consequences emerging.”
The study found that women would have to find a riskier 5 per cent investment yield in order to match the retirement income of men.
Furthermore, 41 per cent of women entering drawdown have no experience compared to 29 per cent of men, while they more likely to never review or adjust their investments and twice as likely to never check their portfolio.
“For women, a smaller pot at retirement combined with a longer life expectancy means investing wisely is crucial. If consumers are less engaged with their pension then they are at risk of making poorer decisions that could result in a lower income, or even outliving their savings. For both men and women, the need for financial advice and guidance in retirement is greater than ever”, added St Louis.
The Financial Conduct Authority’s recent review into drawdowns found that drawdown sales are now double annuities, and that consumers are not fully engaging with guidance.