A recent report shows that seven in ten divorcing couples don’t consider pensions during the divorce process. Partner and expert in family law at Birchall Blackburn Law, Gillian Graveson explores.
Research carried out by Scottish Widows has shown that more than half of married people would fight for a fair share of jointly owned properties and over 30 per cent of couples would want to split their combined savings, but less than 10 per cent of those married couples surveyed would look to get a fair share of pensions.
With 42 per cent of marriages ending in divorce, it’s a harsh reality for many couples. So, it’s surprising that so many avoid having the tough conversation about one of, if not the most valuable asset they own.
Pension sharing became available in 2000, when the court finally received the power under statute to deal with pension funds in a divorce as a specific asset. Before then, as the pension fund could not be touched, its value was often off set again the value of other assets. Having this discussion early on in the divorce process helps to provide a clean break between partners, so nothing will need to be revisited. Despite this, the most recent ministry of justice figures shows that pension sharing orders are made in only 11 per cent of divorce cases.
The average married couple’s retirement pot totals around £132,000, so it would seem obvious to include this asset within your divorce proceedings.
Women are already struggling to save for retirement because of the gender pay gap and time off for maternity leave, research indicates that they are also less likely to have considered their saving options before divorce and they are less likely to explore their pension rights during a divorce.
It’s important that both men and women take steps towards understanding their finances and preparing for their own financial future in case they suffer a relationship breakdown. Couples should also seek to have a better knowledge of what happens to their pension pot during divorce proceedings and treat them as the high value assets that they are.
The lack of advice and knowledge around pensions and how they are handled during divorce proceedings can mean that both men and women are ultimately missing out on money. Pensions vary, and they can be a minefield to negotiate without the correct legal advice.
At Birchall Blackburn Law our expert team of family and divorce professionals are on hand to offer advice and support, to you and your family during divorce proceedings.