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Divorced women are missing out on share of their ex’s pension | Personal Finance | Finance


The survey found that 71 percent of divorcees didn’t include pensions within the financial settlements (Image: Getty)

And the study, released on Tuesday, warns that the financial impact of missing out on a share of a big pension might be “catastrophic” in later life. The most recent research by Which? has found that 71 percent of divorcees didn’t include pensions of their financial settlements, with women more more likely to be negatively affected in the long run.
Since 2000, UK courts have allowed divorcing UK couples to share pensions – but this will not be the norm.

A survey of nearly 1,000 Which? members who’ve been through a divorce since 2000 showed that of the overwhelming majority who opted to pension share, nearly one in five (18 percent) had not considered the division of pensions during their divorce proceedings.

And 22 percent didn’t need to share their pensions in any respect.

But the patron champion says that there’s a risk that this problem will probably be exacerbated by “no-fault divorce” reforms, which could make it harder for some people to access legal advice in good time.

Across the board, the number of individuals opting to pension share is falling.

Data obtained by legal firm Nockolds via a freedom of knowledge (FOI) request revealed that the variety of divorcing couples applying for pension sharing orders has fallen by 35 percent since 2017, from 36,202 to 23,622 in 2021.

Which? is worried that some couples are potentially ignoring one in all the most important assets of their marriage.

Leaving a big pension out of a divorce stands to disproportionately affect older women who’re statistically more more likely to have inadequate pension savings.

While quite a lot of aspects are at play, recent research from Now Pensions states that on average women spend as many as ten years away from the workplace on profession breaks after having children or caring for elderly relatives.

And the burden of care will not be routinely split between married partners.

Lower earnings, sometimes as the results of part-time work, also mean women could also be making lower contributions or earning lower than the automated enrolment threshold.

Because of this, women’s pension pots can stagnate, potentially spelling disaster for a lady who divorces and doesn’t get a share of her spouse’s pension.

The gap between married men and girls’s pension pots starts early, with married men aged 30-44 having on average greater than double the private pension pot of their wife (£18,760 for married men in comparison with just £8,604 for married women).

As you become old, the gap continues to grow, with couples of their sixties affected by the starkest disparity in retirement savings.

In line with research carried out by the University of Manchester and the Pensions Policy Institute, the common married woman aged 64-69 has accrued merely £28,000 in private pension savings, compared with £260,000 for his or her male counterparts.

Under the brand new no-fault divorce laws, introduced in April this 12 months, one person can apply for divorce, with the court then notifying their spouse inside the 20-week waiting period before the conditional order.

Nonetheless, the notification can sometimes be received as late as 18 weeks into the method, leaving little time for the notified spouse to make plans or seek legal advice.

Jenny Ross, Which? Money Editor, said: “Despite the law permitting the sharing of pensions during divorce proceedings since 2000, Which? research shows that a majority of couples neglect to accomplish that.

“Women are almost definitely to be negatively affected by this and the financial impact of missing out on a share of a big pension might be catastrophic in later life.

“Wherever possible, we encourage people to hunt legal and financial advice when embarking on divorce proceedings, with a view to ensure they’re equipped to make the very best financial decisions for the long run.”

Former pensions minister, Sir Steve Webb, partner at consultants LCP, said: “While the brand new online no-fault divorce system has many benefits, it’s vital that it doesn’t end in a give attention to speed on the expense of fairness.”

Caroline Abrahams, charity director at Age UK said: “Divorcing couples failing to separate their private pensions is one in all the only biggest drivers of ladies spending their retirement living on a low income.

“All too often, the main target is on the home while the pension, which in some cases will be price just as much or much more, gets forgotten about, meaning that one partner, normally the person, walks away with a secure retirement income while the opposite gets nothing.

“Major reform is required in divorce proceedings to ensure that that each couple no less than gives serious consideration to splitting the pension, irrespective of how much or little it’s price.”

”No guidance from anyone”

Samantha Lee said she had “no idea” that she could pension share when she was going through her divorce in 2001.

The 48-year-old from Winchester said she had no guidance from anyone as on the time divorce was a “taboo” topic and since she initiated proceedings, she felt it was “all my fault”.

Chatting with the Express, Samantha, who’s a yoga teacher, said: “I had no concept that I could pension share once I was going through my divorce.

“I lost that likelihood and had no guidance from anyone that I could claim a part of the pension for the years I used to be married, for my very own future. Divorce was a taboo word and since I initiated the entire proceedings, I felt it was all my fault and the guilt was huge.

“Although there have been two people in charge for the breaking down of our relationship, society all the time blames the one which closes the door on the wedding. I used to be alone and moved back to my parents. Broke with no job, and moving back to the UK, I used to be very much by myself and had no idea what my options were.

“To me and to the people around me there have been no options, and nobody gave me any advice.

“I had no money to hunt my very own legal counsel and had to make use of my ex-husband’s representation. I felt lost and that this was what it was speculated to be like.

“Looking back through the years since, I understand more concerning the divorce situation and would have worked harder for my very own representation to be heard and the scales to be fairer in our final solution.”

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