New research from mutual insurer Royal London has shown that divorcing women are continuing to lose out on sharing pension wealth upon divorce.
In the early 2000s major changes to legislation were introduced to make it easier for couples to share pension rights. This was meant to benefit divorcing couples as pension are often one of the largest assets available to a couple as they plan their financial future following divorce. Despite this, Scottish Widow’s 2017 ‘Women and Retirement’ Report states that Ministry of Justice figures show that pension sharing orders are made in just 11% of divorces.
Royal London’s recent research has found that divorced women lag far behind their married counterparts when it comes to both pension and property wealth. The research was based on an analysis of the latest wave of the government’s Wealth and Assets Survey (WAS), and looks at the pensions and property wealth of divorced women compared with married couples. Focusing on those who are aged over fifty, the key findings are:
- The average married couple has three times the pension wealth of the average divorced woman; the respective figures are £454,000 for the average married couple aged over fifty, compared with just £131,000 for the average divorced woman; and
- It is not the case that divorced women have made up for a lack of pension wealth by accumulating greater housing equity; in fact, the average married couple over fifty has double the housing wealth of the average divorced woman of the same age; the figures are £359,000 for married couples compared with £169,000 for divorced women.
When planning for your financial future following divorce it is imperative that all marital assets, including pensions, are considered and that pensions are given the same attention as more tangible assets, such as the family home.
Please contact our family team if you would like legal advice in respect of how to divide your family finances upon divorce.