In the run up to International Women’s Day (8 March), Steve Butler, CEO of Pension Potential, warns that millions of women are approaching retirement with a significant income shortfall, with many overlooking annuities as a way to secure financial stability.
New research from the Department for Work and Pensions[i] highlights the scale of the gender pensions gap. Men aged 62-65 hold defined benefit pensions nearly twice as large as women’s (£13,900 vs £7,500) and defined contribution pension pots more than three times bigger (£90,000 vs £28,500).
For many women, this gap creates the very real risk of running out of money in later life, especially since women on average live longer than men.
Other research* conducted ahead of the UK’s first National Annuity Day (22 October 2025) reveals a mismatch between what women want from retirement and how they plan to achieve it. More than half (52%) prioritise “comfort and freedom,” yet 15% expect to rely solely on the State Pension because they have no other savings.
Women are also less familiar with how annuities work and how to get the best deals. Six in ten (60%) are unsure whether annuities can rise with inflation, and more than a quarter (27%) do not realise they can shop around for a better rate.
This knowledge gap matters because annuities directly address one of the biggest financial fears in retirement, the possibility savings will run out. By converting pension savings into a guaranteed income for life, annuities provide certainty and remove the risk of market downturns eroding income at the wrong time.
With the UK annuity market booming, with total premiums hitting £7.4bn in 2025[ii] – the strongest growth in over a decade, Steve Butler said it’s time for women to take a closer look at how guaranteed income could secure their retirement.
Butler said: “Women consistently tell us they want security and peace of mind in retirement. The challenge is that many are retiring with smaller pension pots, often after career breaks or only working part-time, which means every pound must work harder.
“Annuities can play a key role because they provide a guaranteed income for life. That means essential household costs are covered, regardless of how long someone lives or what happens in the markets. For women, particularly those who value stability and certainty, that guarantee can transform retirement from a source of anxiety into one of confidence.”
Annuities can also be tailored to individual circumstances, including options that increase income over time to help manage inflation or provide benefits for a spouse or partner.
Butler adds: “Annuities are not the only solution, but for many women, they can form the foundation of a secure retirement plan. Taking the time to compare providers, understand the guarantees available and seek guidance could be one of the most important financial decisions they make.”
For more information on Pension Potential, visit: www.pensionpotential.co.uk.
* You Gov survey of 2,058 over 50s
