While this April marks the third anniversary of the pension freedoms, new research shows that women are still lagging far behind their male counterparts in the benefits they receive after retirement.

The research from AJ Bell, one of the UK’s largest providers of online investment platforms and stockbroker services, demonstrates that:

• Withdrawals made by women are less than half of those made by men
• There remains a significant knowledge void surrounding the new rules
• Most people feel in control of their retirement savings but still worry about having enough to live comfortably during retirement

Gender income gap

According to the report, the average annual withdrawal made by women using the pension freedoms is less than half those made by men – £4,100 for women compared to £8,500 for men.

This is because the value of personal pensions held by people either approaching or already in retirement is £104,000 but the gender gap is significant.  Men have personal pension savings worth £143,000 on average, compared to just £59,000 for women.

This disparity in levels of pension savings leads to significantly fewer women (63%) feeling in control of their retirement income than men (77%).

Knowledge void surrounds pension freedoms

Awareness of the pension freedoms is relatively high with almost two thirds (63%) of respondents saying they are aware of the new rules.  However, fewer than one in ten people who are aware of the pension freedoms rated their knowledge of the rules as very good, with over half (54%) rating their knowledge as only fair and 13% admitting their knowledge is poor.

Awareness of the pension freedoms is significantly higher amongst men (71%) than women (54%) and more men (39%) than women (25%) feel they have good or very good knowledge of the rules.

People still worry about having enough to live comfortably in retirement

The majority (71%) of people say they feel in control of their retirement income, with more men (77%) feeling in control than women (63%).

Despite this, three quarters (74%) of people are still concerned about having enough income to live comfortably during retirement, with more women (79%) being concerned about this than men (69%).

Another major concern is paying for long term care, with three quarters (75%) of women worrying about this and two thirds (65%) of men.

Interestingly, men (37%) are significantly less worried than women (52%) about having something left from their pensions to pass on to family members.

“Retirement apartheid”

Tom Selby, senior analyst at AJ Bell, comments: “While the disparity in salary and bonus levels between men and women is slowly beginning to get the coverage and political attention it deserves, the retirement apartheid between the sexes remains comparatively ignored.

“There is no doubt that, when it comes to pensions, women have long been second-class citizens in the UK. Over the longer-term, as the gender wage gap closes, automatic enrolment contributions rise and the single-tier state pension is eased in, the chasm between the pension outcomes of men and women should close.

“That does not help women who are approaching retirement now, however.  These women face a battle to increase their pension contributions as much as they possibly can in order to boost their retirement savings. The reality for many is they are going to have to work for longer before they can afford to start drawing down their pension.”

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