Women losing out when pensions are overlooked in divorce, warns Age UK

Age UK is calling for urgent reforms to the divorce process so that private pensions are split fairly when husbands and wives go their separate ways.

A new policy report from the charity, ‘For love and money: Women’s pensions, expenditure and decision-making in retirement’, says that many divorced women are potentially losing out on substantial sums of money and other assets in retirement because the issue of their entitlement to their husband’s private pension never even gets raised as part of the divorce process.

While divorcing couples routinely consider how to divide up the value of any home they own, pension assets frequently get left out of settlements, Age UK explained. This leads to one partner — usually the woman — being made worse off than they could or should be in later life.

New research shows that two in five (40%) women aged 55-70 years are heavily dependent on their partner’s income for a decent retirement. Yet if the relationship comes to an end, many don’t realise that they are entitled to a portion of their husband’s private pension wealth, or they may underestimate the importance of dividing it and so walk away with no continuing rights.

Currently, for divorcing couples who do not go to court, there is no automatic right to know a spouse’s pension value at divorce.

The report calls for this to change, with it to becoming the norm for private pensions to be considered as part of the divorce process and, wherever possible, divided fairly between spouses. Age UK notes that, although divorce rates for women aged 60+ are low compared to the overall rate, across their lifetimes up to one in three women currently aged between 55 and 70 years have experienced divorce, with huge implications for their retirement incomes.

“It is extraordinary and frankly unacceptable that so many women are potentially missing out on significant sums of money when they divorce, sometimes without even realising they have lost future income which probably should have been theirs,” said Age UK’s charity director, Caroline Abrahams. “The Government must act quickly to make consideration of private pension wealth a proper part of the divorce process.”

Posted on September 25th 2018

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