Women Are Missing Out on £5 Billion in Pension at Divorce
Divorce is often an emotionally and financially challenging time, especially when it comes to the division of assets. While most people focus on the family home or savings, one of the most valuable assets, the pensions, is too often overlooked.
This can have long-term consequences, particularly for women, who may already face financial disadvantages later in life. Understanding your rights to pension sharing during divorce is not only important, it is essential for securing your future.
Why Are Pensions Overlooked in Divorce Settlements?
Pension sharing is a crucial part of UK divorce law. However, research shows that many women may be losing out on approximately £5 billion annually in pensions during divorce proceedings.
Despite pensions often being the second-largest financial asset after the family home, they are frequently overlooked. Surveys reveal that while more women will negotiate over property, savings, or income, only 1 in 10 women push for their share of a pension – even when the average pension pot is worth around £132,000. Shockingly, it’s been reported that some women are more likely to fight for custody of a pet than for a pension.
Find out more about financial settlement in divorce, including pensions and pension sharing orders by visiting our Matrimonial Finances page.
The Financial Impact of Divorce on Women
According to Scottish Widows, women are disproportionately affected by financial hardship following a divorce. Women are less financially prepared for retirement than men with a reported 52% of women saving adequately for later life, compared to 59% of men. Among divorced women, that figure drops further to 49%.
This disparity is often due to the gender pay gap, career breaks, and maternity leave, which can all significantly reduce pension contributions over a lifetime.
This is why it is recommended that you discuss with your solicitor your need for a pension sharing order when divorcing. A pension sharing order is a legal agreement that formally allows the transfer of an agreed percentage of one person’s pension to the other, giving each person their own pension pot and helping to ensure a fair division of the marital assets.
Changing Attitudes towards Pension Sharing and the Importance of Legal Advice
The good news is that there is a growing awareness of the importance of pensions in divorce. With rising divorce rates and an increase in women pursuing professional careers and business ownership, more women are now actively seeking legal advice about pension rights during separation.
Taking Prenups Into Account
Read our news article on prenuptial agreements and how the old myth is being dispelled that prenuptial agreements are only for the super wealthy.
Why You Shouldn’t Settle Your Divorce Without Considering Your Pension
Before agreeing to any final divorce settlement, it’s essential to consult a solicitor or family law expert. Pensions can and should be included in financial disclosure and may be shared or offset to ensure a fair division.
If you’re currently going through a separation or considering divorce, don’t underestimate the value of your pension rights. Ensuring a fair financial settlement today can make a substantial difference in your retirement security tomorrow.
Yes. Pensions can be divided using a Pension Sharing Order, Pension Offsetting, or Pension Attachment Order as part of the financial settlement.
A Pension Sharing Order is a legal agreement that transfers a percentage of one partner’s pension to the other, giving each person their own pension pot.
While it’s not legally required, it’s strongly advised to seek legal advice. Pensions are complex and mistakes can lead to long-term financial loss.
Yes, most pensions — including workplace pensions, private pensions, and state second pensions — can be included, though the basic State Pension usually isn’t.
If pensions are not included in the settlement, one party could miss out on significant financial security in retirement. It’s important they are considered and properly valued.
Contact Our Expert Family Law Team to Discuss Your Pension Rights
Edwards Duthie Shamash are your expert divorce solicitors in London. At Edwards Duthie Shamash, we understand how complex and emotional the divorce process can be. If you’d like to discuss your pension rights, to discuss pension sharing orders, or any other aspect of your separation, then please contact us. Our friendly team of legal experts is here to help you every step of the way.