Newcastle’s Top Divorce and Family Law Specialist, Joanne Major comments a recent study by Phoenix Group warns that divorcing women need a better understanding of pension issues. The study found that 66% of divorced women rely simply on the State Pension and that one in five stopped paying into a pension altogether after divorce. Additionally, half of divorced women made no contributions at all to a pension scheme whilst married but only one in six had rights to a pension through their former husband. The study further revealed that only 6% of divorcees received either a pension sharing order or pension earmarking order in their divorce settlement.
Women have been comparatively financially worse off in retirement than men for some time, despite changes made to the law governing the distribution of pension assets on divorce more than one decade ago. Given that it is perfectly possible for wives to receive a share of their former husband’s pension, it is essential that proper legal advice is given at the time a settlement is being negotiated. It will often be appropriate for financial advice to be obtained to provide details of the income derived from the pension going forward. Many women believe that if they obtain a pension sharing order their income in retirement will be taken care of. This is often not the case, particularly as the study has shown that whilst men will generally continue to work and contribute towards their pension after divorce, many women will not. A specialist family law solicitor should give their client clear information on divorce settlements, including provision on retirement, but it is important to remember that financial advice may also be required in addition to sound legal advice.