Women who have entered income drawdown since the pension freedoms have retirement pots a third smaller than the average man’s pot.
The latest research into the gender pensions gap, commissioned by AJ Bell, shows that those women had on average £118,000 in their retirement pot compared to £179,000 for men.
Women also withdrew smaller amounts than men – £6,710 compared to £8,002 – and rated their confidence in pension freedoms reform knowledge lower, with 5 per cent describing it as “very good” compared with 18 per cent of men.
A nine percentage point difference exists between the genders in terms of how concerned they are about running out of money, with women anticipating lower investment returns too.
AJ Bell senior analyst Tom Selby says: “While there are policy reforms that could help boost women’s pensions – such as addressing the net pay anomaly which means many lower paid workers miss out on pension tax relief altogether – the central problem is the pay gap. If this can be eradicated, you would expect the retirement income gap to close dramatically.
“Women using the pension freedoms tend to be less confident in their knowledge of the reforms than men. There is no obvious reason why this should be the case, and could even reflect a greater honesty among women in the face of some fairly unpleasant complexity.
“I would certainly be surprised if one in five men could hand-on-heart say they understand the workings of the money purchase annual allowance and pension death benefits.”