Fair shares? No such thing when it comes to divorce and pensions…

Most alarmingly perhaps is that 60% of divorced women are on track for living in retirement poverty, meaning they wouldn’t be able to afford even the minimum retirement lifestyle. While there are numerous reasons for this, a big one is that pensions are often not considered or shared in the same way as other property and financial assets in a divorce. The same report also stated that 60% of women didn’t even discuss pensions during their divorce.

What’s more, the Nuffield Foundation has also just released its first in-depth report of asset division in England and Wales on divorces, providing a more accurate picture of how money and property is divided in the 100,000+ annual divorces taking place each year.

Paul Rowe, owner of Pro Start Pensions says the report is a desperate bid to consider pensions when divorcing; saying “A pension is one of the most overlooked areas during separation when really it should be towards the top of the list along with other assets such as property and savings.

“This report also shines a light on the startling gender ‘pension’ gap that no one is talking about, with the majority of women fairing far worse than their male counterparts in retirement as they were the parent who took time away from work and therefore pension contributions when raising children.”

The 397 page report goes on to reveal some more hard hitting headlines when it comes to pensions…

• In most cases both spouses had pensions, often of differing values, with the size of the women’s pots significantly lower than the men on average
• All women in general were forecast to receive 37% smaller private pension pots than their former spouse and a clear reason why 59% of divorced women claim they are not adequately prepared for retirement financially
• 37% of divorcees did not know the value of their own pension pot
• The overall attitude was that pensions ‘belong’ to the contributor and a wish/acceptance to keep it that way

Paul added: “Overall, it flagged a HUGE blind spot in divorce and a somewhat blazee attitude to something deemed ‘a long way off’ or ‘never going to happen’ for many of the younger clients, an attitude I myself witness on a regular basis.

“There’s a big question raised here about just how this area has got so overlooked as the real life implications for divorced women in particular are huge, if not life changing. But rather than focus on what’s happened, I want to address what we can do to stop this and start to close the gender pension gap bit by bit.”

Paul advises that when it comes to your own personal pension, whether you’re single or married, you need to know your finances. Whether you keep it in a diary, on a phone note or in a filing system - whatever it may be – somewhere you need to have the details of your pension and be making the time to check in annually with your pension provider or your pension advisor to see how it is performing and what your forecast is. He asserts that this even applies to those in their 20s, 30s and 40s too!

Secondly, if you find yourself in the unfortunate position of separating from your marital partner then pensions need to be up there with the top level asset division discussions such as house, savings and cars etc. Lots of factors come into play when considering how to split a pension, such as if either party took time off to raise children, if one of the individuals earnt significantly more than the other and so on and so forth. To understand proper pension division you should seek proper advice, albeit through a solicitor or financial advisor, this is not an area to be taken lightly and should be gone through properly by experts.

Paul summarized by adding: “Just by following step one and having basic pension hygiene in place, ideally from the start of your working career, will make all the difference should you come across any ‘bumps in the road’ as you navigate life.”

Pro Start Pensions launched earlier this year and primarily works with SME’s and self-employed people offering a number of advice and guidance services including; setting up or combining pensions and retirement planning.

To find out more about Pro Start Pensions and its range of services please visit https://prostartpensions.co.uk/.