Gender equality in retirement

From 21 December 2012, the practice of using gender to calculate insurance contracts and annuity rates will be outlawed. In future, women who opt to receive drawdown pension income will find that their maximum amount of available income is determined using the same calculations as those used for men.


In March 2011, the European Court of Justice ruled that the practice of considering gender when calculating insurance contracts and annuities contravened discrimination laws. More recently, HM Revenue & Customs issued new guidance for pension providers, ordering them to use the same rates for women as men when calculating their maximum drawdown pension from 21 December 2012. Income drawdown allows the individual to withdraw income from their pension fund while leaving the fund invested, thereby allowing it to benefit from any further growth. The amount of income that can be withdrawn from the fund is capped in order to ensure the pension pot cannot be drained. Traditionally, income drawdown rates for men and women have been calculated using two different tables – one for women and one for men. Because the life expectancy of the average British man is shorter than that of the average British woman, the amount of income a man has been able to withdraw from his pension fund has been higher than for a woman. However, the new rules will ban this practice, allowing women who opt for income drawdown to draw an increased level of income, while men’s entitlement will remain unchanged.