A major study by the Pensions Policy Institute (PPI) and Manchester University found that men had considerably more pension wealth than women. This gap widened with each increasing age group, with the findings showing that on average:

•    Men aged 45-54 had pension wealth of £86,000, compared to £40,000 for women
•    Men aged 55-64 had £185,000 in pension savings, compared to £55,800 for women
•    Men aged 65-69 had over £260,000, compared to a tiny £28,000 for women.  
•    
Staggeringly, in half of couples with some level of retirement savings, one partner was found to have more than 90% of the pension wealth.  

With this huge gap in mind, financial advisors and family law experts are warning that women should consider the value of pension wealth when agreeing a divorce settlement.  

Pensions aren’t always distributed fairly post-separation, potentially due to a lack of awareness of the true value of pension pots and each partner’s rights to access a share of retirement savings. In fact, research shows that less than half of separated retirees discussed pensions during divorce proceedings.  

Other assets such as the family home may hold both financial and sentimental value, but they don’t always represent fair compensation. And with the Pensions Policy Institute research showing the major difference between men and women’s savings for later life, there’s a risk that women could be left worse off.  

According to the PPI’s Tim Pike:

“All of these people could, in theory, distribute their pension assets in a fair way on divorce, yet the research found no evidence to suggest this was happening.  

“Divorced women have very little pension and significantly less than married women.”

What are your pension rights during divorce?

Pension funds are often the second largest asset for a divorcing couple, after the family home. It may seem like the easiest option to ‘settle’ for the family home and let your spouse keep the pension, but this could be a big mistake.  

Pensions are considered a joint asset by divorce courts, as both parties have contributed in some way. This is often in the form of taking responsibility for childcare, allowing the other spouse to advance their career and build up a pension – often at the expense of their own career.  

There are two main ways you can divide a pension, The first is ‘earmarking’, where a proportion of the benefits are paid to the former spouse when the pension-holder retires. The second is for the pension to be valued and divided, which is a good way of giving both parties a fair share and a clean break.  

It’s crucial to discuss all financial matters including pensions during divorce, both with your ex-partner (if possible) and your divorce solicitor.  
 
Get in touch with Wirral divorce solicitor Tracey Miller Family Law for practical, jargon-free advice you can trust.