Are divorced women facing an impending pension crisis? Recent research has shown that women aren’t claiming the shared pension wealth they are entitled to during divorce proceedings, and it could cost them dearly later in life. Royal London found that women who divorced ended up with less than one third of the average pension wealth of a married couple, with the insurer concluding that separated women are at risk of becoming “pensions poor relations”.

Pensions can account for a huge amount of personal wealth, particularly with final-salary type plans, which can be worth hundreds of thousands of pounds in the long-term. But this is something that’s often overlooked during divorce proceedings, and often one party will lose out — leading to serious problems in retirement.

A pension earned during marriage is usually considered a joint asset and should be treated as such during divorce. But the legislation around sharing pensions is widely misunderstood. Why is it such a pervasive problem, and what can be done about it?

Why do people forget about their pensions during divorce?

It would seem that pension wealth simply doesn’t get the same attention as other assets during a separation, perhaps because they aren’t as visible as other types of asset. For instance, property, physical belongings, and savings are all more likely to be at the forefront of a person’s mind during divorce, meaning that pensions are often left out of the equation.

It’s also thought that the complexity of sharing pensions during divorce puts many people off seeking what is rightfully theirs. Despite attempts to simplify legislation back in the early 2000s, the specifics of the law remain a mystery to most people, meaning they aren’t in a strong position to negotiate for a fair settlement during a separation.

Why does this problem affect women disproportionately?

As evidenced by Royal London’s figures, this problem seems to affect women far more often than it does men. It would be easy to assume that divorced women make up for taking the lesser share of pension wealth by accumulating other high-value assets during a separation, like housing. But this is far from the truth, with the research finding that divorced women end up with half as much housing wealth as married couples.

There are a number of possible explanations which could be causing pension inequality. Many women don’t realise that they may be able to claim a portion of any pension wealth that their husbands have built up during the course of their marriage and, as a result, they don’t attempt to claim these during divorce.

In addition to these pervasive misconceptions, a culture of non-disclosure and secrecy could also be to blame. Prudential found that nearly a quarter of couples have never had a discussion about pensions with their partner, and 7% of those who had admitted that they hadn’t spoken about pensions in over 10 years. If a couple isn’t open and transparent with one another about their pension plans, they may not even realise that pension assets exist when they sit down to negotiate a settlement.

When you combine all of this with the fact that women are less likely than men to build up an adequate personal pension over the course of their careers, and are more likely to take breaks from work to have children, it’s easy to see why women are being left short (Moneywise). Clearly, women need to take steps to protect their fair share of pension wealth, and legal professionals need to do more to help them.

What can be done?

When it comes to rectifying the issue of shared pension inequality after divorce, both the separating parties and the professionals who advise them have parts to play. It’s important that women take steps to stay informed about shared pensions and learn more about what happens to these during divorce. Women should also make a point about speaking to their ex-spouse about any pensions they have before initiating divorce proceedings.

Solicitors need to make sure that they offer their clients comprehensive advice about any entitlement they may have, and they should ensure they’re up to speed with the latest rulings and legal news. Here at Major Family Law, we can guide you through the legal complexities of divorce, so you can be sure you get every penny you’re owed towards your future retirement. Our solicitors are experts in financial provision and so can help with complex cases where lots of different pension plans and assets may be disputed.

We offer clear-cut, thorough legal advice, helping you to understand the sometimes-complicated legislation around shared pensions more easily.  If you’d like to speak to us about any of the issues discussed here, or seek legal representation for a divorce, give us a call on 01661 824582 for a free, no-obligation consultation. You can also get in touch using our online contact form.