Family Law

Research from Scottish Widows has found that 71% of couples don’t discuss pensions during divorce settlements and that women’s finances are disproportionately impacted by marriage breakups.

The Women and Retirement Report 2017 is the result of research conducted to assess the unique challenges facing women as they prepare for retirement.

The report also found:

• In general, fewer women (52%) than men (59%) are preparing adequately for retirement.
• A quarter of women (24%) have a pension pot smaller than their husband’s.
• Almost half of women (48%) have no idea what happens to pensions when a couple gets divorced.
• Over a quarter of women (27%) who discussed pensions during a divorce had no pension pot of their own.
• 16% of women lost access to a pension pot when they split from a partner.

Read the report in full here.

Catherine Stewart, Retirement Expert at Scottish Widows, said:

‘Generally speaking women’s retirement prospects are worse than men’s. The persistent gender pay gap, maternity leave and career breaks can all hold back women’s earning potential and this often impacts pension savings. Relationship breakdowns can leave people really vulnerable but, quite simply, they’re also throwing significant sums of money down the drain.

It is important that everyone – whether single, married or divorced – take steps to understand their finances and prepare for their independent future should a relationship break down. We would urge men and women to better understand the legalities around what happens to pension pots during divorce proceedings, as often they are the second largest, if not the largest asset a couple owns.’

Nigel Shepherd, chair of Resolution and Head of Family Law at Mills & Reeve, said:

‘Pension sharing was introduced almost two decades ago, but it is clear that all too often in a divorce pensions are still not being taken into account properly or at all. The problem has been made very much worse by the fact that so few people are now entitled to legal aid and are having to negotiate the minefield of financial issues on divorce without even basic legal advice. This is storing up real problems down the line, in particular for women.

While some pensions are relatively straightforward, others (for example public sector schemes) are complex. There is no substitute for expert legal and financial advice and the costs involved should be considered an investment.’

Bryan Scant, solicitor at law firm Coffin Mew, said:

‘Pensions are an extremely important asset that have to be considered upon divorce. Many divorcees will feel that they have supported their spouse throughout the marriage and enabled them to work and contribute to their pensions, or have gone without so that their spouse could pay more into the pension to save for retirement. It is only fair that these parties should receive their rightful share on divorce.

People need to be careful that they are not just thinking of the "here and now" when considering how to divide their assets. They also need to consider what pension provision they will have in their retirement.

If you have already divorced and not dealt with pensions then it is important that you speak with a specialist family lawyer to consider your options. Many couples divorce without submitting a financial order to the court, which means their claims for a Pension Sharing Order may remain open. If that is the case, then it may be appropriate to seek a Pension Sharing Order from your ex-spouse. If this is not dealt with promptly, it may come back to haunt you upon retirement.’