Women going through divorce could be missing out on up to £5 billion every year because they don’t discuss pensions when dividing up the assets of the marriage.
Pensions are often the second largest matrimonial asset after the matrimonial home. Whilst the ability to share in a spouse’s pension has been available to divorcing couples for nearly 20 years, all too often in divorces pensions are still not being considered properly or at all.
A recent study by pension provider Scottish Widows has found that 7 in 10 couples going through divorce proceedings do not consider the division of pensions. This could amount to as much as £5 billion a year that divorcing women are missing out on. 1 in 10 divorced women go on to be completely reliant solely on their state pension for income in retirement.
The research also found that more than half of married people would fight to get a fair share of property (56%) and 1 in 3 would look to equally divide savings. Strangely more people seem concerned about losing a pet (13%) than sharing a pension (9%).
The potential losses for women are due to the fact that women are generally less well prepared for retirement than men. Only just over half of women think that they are saving enough for retirement compared to men. In addition to women suffering from the gender pay gap they may have also taken years out of employment to raise children or worked part time. The effect of this is that often women have a smaller pension ‘pot’ making it even more important that pension sharing is considered when a couple separates and thinks about how to fairly divide up the assets.
Problems have been made much worse by the fact that so few people are entitled to Legal Aid and are having to negotiate a minefield of financial issues on divorce without basic legal advice. Many pension schemes are complex, including public sector pensions, and there is no substitute for expert legal and financial advice.
Noelle Heath is a Divorce and Family Solicitor at Morrish Solicitors. If you would like more information on Divorce and family matters then please contact her on 033 3344 9600 or email her at [email protected]