Among the general population, men’s private pensions are, on average, 40 percent larger than women’s, says the research. But the average difference between pension income for men and women among retirees applying for a mortgage is 269.5 percent. The chasm in pension pots between a husband and wife becomes an issue when applying for a mortgage because lenders fear if the husband dies and his pension disappears, the widow will not be able to afford the repayments on her income alone. The study by retirement mortgage specialists Responsible Life says the data show the emergence of a two-speed retirement.
Wealthier couples can own their homes outright and live off pension income. However, those who still need a mortgage or re-mortgage suffer a large gender pension gap that makes it very difficult to secure loans and qualify for the cheapest deals.
More than half – 53.5 percent – of retired couples making a mortgage application have a gender pension gap of more than 100 percent, according to the study.
The largest divide researchers discovered was a massive 4,433 percent.
The relatively recent introduction of workplace pensions promises to help ease the problem, the report says.
But family commitments and a shift to part-time working among parents are the two main factors credited with inflating the gender pension gap in later life.
The study analysed 320 retiree mortgage applications submitted to the Retirement Mortgage Service.
Steve Wilkie, executive chairman of Responsible Life, said: “The gender pension gap can be as damaging as the gender pay gap, particularly when it comes to borrowing against your home.
“That problem worsens the older you get, until couples unexpectedly find themselves unable to borrow what they think they can afford because sole survivorship suddenly becomes the dominating factor for lenders.
“Most studies on the gender pension gap focus on average statistics between men and women or all ages but this analysis looks at the consequences of this problem for those at an age when it can be really damaging.
“As couples approach retirement, providers become less willing to lend.
“They are almost always reluctant to accept the sale of the property as a valid repayment plan should the mortgage payments become too much of a burden or unexpected costs begin to eat into their ability to pay.”