Seven in 10 couples fail to discuss pension savings during a divorce, leaving millions of women worse off in retirement.
New research shows that more than half of married couples (56%) are willing to fight for a share of jointly owned property while more than a third (36%) wanted to split combined savings during a divorce. In comparison, less than one in 10 (9%) were concerned about separating pension savings. This is despite the average married couple’s pension pot standing at £132,000.
Scottish Widows conducted the study and said that women are more likely to emerge from the divorce financially worse off than men, with women accumulatively losing out on pension payments to the value of £5 billion a year.
The research found that women were generally less prepared for retirement than men, with just 52% saving enough for retirement compared to 59% of men.
This figure drops to 49% for divorced women, a quarter of which said they were unable to save anything into a pension. Meanwhile 12% of divorced men were unable to save for retirement.
The pension firm believes the disparity in pension savings following a divorce is due to the gender pay gap, maternity leave and career breaks, all of which can have an impact on women’s lifelong earning potential.
With many married women reducing their working hours or leaving the workforce completely so they can raise children, saving for retirement can become difficult and, if women have no income of their own, impossible.
The research found that 10% of divorced women were left relying completely on the state pension following their split with their spouse.
If a divorcing couple wants to split the pension or one spouse wishes to gain access to their former partner’s, what are the options?
Pension sharing allows divorcees to get a share of their ex-spouse’s pensions. A ‘pension sharing order’ will need to be obtained from court.
Pension offsetting enables those going through a divorce to take another asset instead of the pension. This could include a home, high-value asset or business. This does not require a court order.
Pension attachment lets divorcees get a share of the pension, either as income or a lump sum. A ‘pension attachment order’ is required from court.