Women who are drawing down on their pension can in a few weeks expect an income as much as 40 per cent higher than just a few months ago.
The introduction of the EU gender directive, rising gilt yields, and this month's increase in the Government Actuary's Department (GAD) drawdown cap will combine to boost the sums women can drawdown, while there will also be benefits for men.
Pension provider Standard Life says that a 60-year-old woman with a drawdown pension pot of £100,000 could get as much as £6,120-a-year from March 26, compared to just £4,300 on December 1, a rise of more than 40 per cent.
Alistair Black, of Standard Life, said: 'The increasing gilt yields and the restoration of the GAD limit is heartening news for those in drawdown - especially women.
'With our ideas on improving the method of calculating income, 2013 could be a very important year for income drawdown.'
Income drawdown allows people to take income directly from their pension fund while it remains invested and benefits from any future growth, as an alternative to using their pension pot to buy an annuity income.
The income level you can draw is limited by the GAD rate on income drawdown, which is itself calculated based on gilt yields. These have risen to 2.75 per cent in March, up from 2 per cent in December.
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However, only those who are due to have a review are able to take full advantage of this. Drawdown products are subject to an income review every three years, but an additional review can be requested on the anniversaries of the last review.
Unfortunately, for those whose reviews are due to take place before March 26, they will have to wait a year before they can take advantage of the 120 per cent rate. Meanwhile those who had a review before December 21 will have to wait until the anniversary to get the gender equal rates.
The EU gender equality directive came into force on December 21 and means that insurers are no longer able to use sex as a factor when offering financial products.
In terms of retirement income, men previously got higher incomes because they had shorter life expectancies.
But while the directive has been bad for men when it comes to retirement income, the increase in the GAD limit and the gilt yield rise should still have significant benefits for them too.
Scottish Life has said that from yesterday it has started quoting the 120 per cent GAD limit on its new income drawdown plans.
Business development manager Fiona Tate said: 'For existing customers who are affected by the change, our yearly review packs have been updated to show the 120 per cent maximum income.
'We’re confident our approach will help advisers achieve the best outcome for their clients, though obviously we’re all dependent on the legislation actually coming into effect on March 26.'