Women getting a divorce need to discuss pensions
Age UK has voiced concerns that, when couples are going through a divorce, the topic of discussing pensions should be a norm.
This would stop a spouse – usually, the woman – losing out in old age, the organisation claims.
Up to one in three women aged between 55 and 70 have experienced a divorce, with huge implications for their retirement incomes, Age UK says.
Due to this, the group is trying to encourage couples to ask questions about their pensions during the divorce process, in order to avoid unfairness when finances get divided.
It suggests making ex-partners sign a declaration saying they have considered whether to value and divide private pensions, and acted accordingly on this.
According to research, 71 per cent of divorcing couples don’t discuss pensions as part of their settlement, while 48 per cent of women and 41 per cent of men have no idea what happens to pensions when a marriage ends.
“While it is not practical or always desirable for the compulsion to consider pensions in divorce settlements, Age UK believes that a ‘nudge’ should be introduced into the divorce process that encourages people to include them,” the group’s report said.
It added: “Women suffer unfairness in the divorce process due to lack of access to legal representation, partners frequently excluding their pensions from a settlement, and widely inaccurate perceptions about the real value of pensions.
“It is not a requirement of divorce to include pension assets in a separation agreement, nor is it an automatic right for the partner to know their value unless couples undertake financial proceedings through a court.
“However, when lawyers are involved in drawing up the settlement then it is more likely they will be considered.”
Caroline Abrahams, Charity Director at Age UK, added: “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.
“The Government must act quickly to make consideration of private pension wealth a proper part of the divorce process.
“It is crucial that women are helped to build up a decent private pension, get the right information and advice at the right time, and as a matter of law and practice have fair and equal access to the private pension wealth they have built up with their husbands if they are divorced or bereaved later in life.”