Male pensioners could see their annuity payouts reduced by up to £10,000 over the lifetime of their retirement, thanks to an EU Directive that comes into effect on 21 December.
The EU Gender Directive forces insurers to disregard gender when they set their pricing, so rates and premiums on products such as car insurance and annuities will become the same for both men and women.
This means that while men have typically had more generous annuity rates from insurers than women, because on average they don't live as long as women, from tomorrow annuity rates will be equalised, meaning men could receive a much smaller payout while women could receive more money from their annuity provider.
Research by PricewaterhouseCoopers shows that based on a £100,000 pension, a man could receive £10,000 less from when he buys the annuity to when he dies.
Raj Mody, head of pensions consulting at PwC, comments: "While a small number of women will be better off from the ruling, eight out of ten annuities currently sold in the UK are bought by men, so many more people risk losing out than gaining. Women who are beneficiaries of joint life annuities purchased by their male partner will also be affected as they will end up with a lower income."
He says people approaching retirement must look closely at different rates from various insurers to find the best rate on the market.
"It is more vital than ever that people do not simply accept the rate offered by their pension provider. The difference between the best and worst annuity rates in the market can easily be around 20 to 30%."
On the other hand, women could see bigger annuity payments and also more income if they take the capped drawdown route.
According to Skandia, women that take capped income from their pension, rather than buying an annuity, will have their income withdrawal calculations based on male rather than female income factors. So when their pension income is next reviewed, women will be able to take more income.
The chancellor's Autumn Statement also announced that pensioners will soon be able to take 120% of the Government Actuary's Department rate rather than 100%, which will also give people doing capped drawdown an uplift in the income they can withdraw from their pension each year.
While there is no timescale for the change to 120% yet, Skandia says the start of the new tax year, on 6 April 2013, is a "real possibility".
The company estimates that combining the gender neutrality with the 120% of the GAD rate means women could withdraw almost 33% more from their pension from the next tax year.
Adrian Walker, Skandia's pension expert, comments: "There is a real opportunity for women using capped income withdrawal to receive more income from their savings next tax year. This could be of benefit for those who have seen the maximum annual income withdrawal from their pension decrease significantly in the last two years as a result of falling gilt yields and previous policy change by this government.
'When the start date of the new uplift is announced it won't have immediate benefit to all, so it's important that people are aware of the options available to them. One simple check women could do now is to confirm whether their current capped income contract offers an annual review facility. If it doesn't then they should consider seeking financial advice to discuss other alternatives that may be available to them."
This article was written for our sister website Money Observer