Pension sharing is once again in the news because according to Age UK, thousands of divorced women in the UK are worse off in retirement because they didn’t factor into their financial settlement the pension fund of their husband.
A pension fund can be one of the more valuable assets to a marriage especially in a long marriage where a husband has been paying into a pension pot for many years. If a wife has been the stay at home mum, looked after the family and the home to enable the husband to go out to work and earn for the family, she will have lost out on pension provision for herself. The husband could have a work related pension that both he and his employer has been paying into which has built up over many years and could be a valuable income source in retirement. If, on divorce the pension is not shared, the wife could end up with considerably less income in retirement.
According to age UK between one and three women currently aged between 55 and 70 have been through divorce but according to the Office for National Statistics men approaching retirement are likely to have pension fund worth three times that of women.
An added concern is that some women could end up with less state pension because of changes to the state pension entitlement, if they have not built up their full contribution before retirement and can no longer claim based on their spouses or civil partner’s contributions.
If you have decided to divorce it is vitally important that you get independent legal advice before you commit to a financial settlement. Wives can sometimes be too quick to negotiate keeping the house for the sake of pension entitlement without waiting to get advice about how what a pension might be worth to them in retirement.
If you are worried that you could be losing out on pension call Townsend Family Law on 01992 892214 to speak to a solicitor in our Family Team.