According to recent research published by Scottish Widows, women are losing out on £5 billion every single year simply because they are not aware of their legal rights on pension sharing when they divorce.
The research shows that around seven in every ten couples don’t even discuss pensions before they divorce, despite the fact that it is often the biggest asset they have after the family home.
Generally, women are less prepared for retirement than men. They may have taken time out from a career to raise their family and paid less into their own pensions as a result. They may also have little or no savings of their own.
As far as the law is concerned, work, personal and additional state pensions are as much a marital asset as the family home, regardless of whose name the pension is in.
Don Bird, partner and head of family law at Atherton Godfrey, commented: “The loss of legal aid in divorce has led to many people trying to negotiate financial details without legal support and it’s in these situations that pensions are overlooked.
Whether the split is amicable or not, a family lawyer will negotiate to ensure there is a fair outcome for the client.
We always advise clients to consider pensions and the values involved as part of the overall settlement, alongside any property, other assets and savings the couple have. Depending on individual circumstances, there are various steps that can then be taken to compensate for a difference in pensions, including sharing of the pension fund, offsetting it against other assets, or ordering that part of one party’s actual pension be paid to the other.”
Age UK has launched a campaign, calling on the government to change the law relating to pensions. This would make it compulsory for couples who are divorcing without legal support to at least consider pensions as part of the process. However, the best way of ensuring you know your full entitlement is to take expert legal advice.