Women who opt for a drawdown product have an income that is 37 per cent lower than men, according to new research by Zurich.

Its report Drawdown: Is it working for consumers?, surveyed 742 people who have moved to a drawdown product since the pension freedoms.

On average, men in drawdown have a pension pot of £212,000, which at a 3 per cent yield secures an annual income of £6,360. In comparison, women have an average pension pot of £132,000, equating to an income of just £3,990.

This means women have £2,370 less per year and would need to find riskier investments yielding 5 per cent to match the retirement income of their male counterparts.

The study also revealed the emergence of a new ‘gender drawdown gap’ that is potentially putting more women at risk of running out of cash. It found that 41 per cent of women switching into drawdown have no investment experience compared to 29 per cent of men.

Women are also more likely to never review/adjust their investments (17 per cent vs 10 per cent) and twice as likely (13 per cent vs 6 per cent) to never check the performance of their portfolio.

Zurich 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.

"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.”

In addition, according to Zurich’s Workplace Savings Barometer, analysis of 250,261 workplace personal pension plans held with Zurich between 2013 and 2016, there is a ‘gap’ between the amount that men and women receive in employer pensions contributions, which if left unaddressed could result in a shortfall of £47,000 by the end of a woman’s working life.

In 2016, on average, men under the age of 35 received £217 more in employer pension contributions than females of the same age. Furthermore, between 2013 and 2016, men benefited from pension contributions of 7.8 per cent of salary each year from their employers compared with 7.0 per cent for women.

This difference meant that the value of the employer pension contribution was £3,495 for men and £2,489 for women – a difference of over £1,000 over the four-year period. With wage growth taken into account, this difference could amount to a shortfall for women of £46,689 by the end of a working life.

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