Divorce and Pensions

According to new research from Mercer, no:pensions, and the Pensions Policy, divorced women in the UK retire with substantially smaller pensions savings than their male counterparts.

The study reveals that divorced women reach retirement with about 61% less private pension wealth compared with divorced men, a gap driven by lower lifetime earnings, career breaks, and limited pension sharing in divorce settlements.

Many divorced women are retiring with pension pots that are a fraction of those of men, leaving them at greater risk of financial insecurity in old age.

In light of this, please see comment from Anne-Marie Hamer, partner at Spencer West LLP:

“The data reflects what we family lawyers see in practice. Many men who are divorcing in their late fifties and sixties hold significantly higher pension values, shaped by historic working patterns where men were more likely to have long, uninterrupted careers and senior progression, while women took time out for caring responsibilities.

Pensions are often the forgotten aspect of divorce despite being one of the largest assets in a marriage. Marriages are a partnership and lifetime commitment, and it is commonplace for one party to have amassed a greater pension than the other. Full and frank disclosure is essential to equitable pension sharing in divorce proceedings. Until a financial settlement is reached, both spouses retain a vested interest in any marital pension pot.

As working and societal patterns continue to change, this gap should narrow accordingly, but it remains vital that pensions are consistently factored into divorce outcomes to reflect contributions to a relationship and ensure parity and with the instruction of experts identified at the earliest opportunity .”

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