New research has revealed that less than one in 10 couples consider pension assets when sorting out a fair financial settlement.
Despite the fact that pension pots can be a sizeable asset, many divorcees are not planning ahead. By comparison, 56 per cent of couples say they would fight for their share of a jointly owned property, whilst 36 per cent wanted to see a fair split of combined savings.
Based on these figures, it is estimated that divorced women could be missing out on a total of £5 billion in pension payments per year
Scottish Widows, the pension provider which conducted the research, found that just 9 per cent of couples were concerned with getting a fair share of pension savings despite the average married couple’s retirement funds totalling a significant £132,000.
The research also found that, in general, women were less well prepared for retirement than men, with just 52 per cent saving enough for later life compared to 59 per cent of men.
For divorced women, the number reduces even further to 49 per cent, with nearly a quarter claiming that they could not afford to save anything into a pension – double the rate of divorced men (12 per cent).
The study revealed that 40 per cent of divorced women believed their retirement prospects had worsened as a result of their marriage breakdown, compared with 19 per cent of men.
According to Scottish Widows, nearly half of women surveyed (48 per cent) had no idea what happened to their pension pot during a divorce. The research found that 16 per cent of women lost access to any pension pot when they split with their partner and 10 per cent were left relying completely on the state pension.
“For example, pension offsetting allows one party to take another asset, such as the family home, instead of a pension. Another option is a pension attachment, which provides a share of the pension income, either as a lump sum or both, when it starts being paid.
“As this latest research would seem to suggest, divorcing couples appear to be ignoring pension assets which could be a costly error. Admittedly, pensions can be a complicated asset to understand, which is why it is so important to seek expert legal advice to ensure that your financial settlement is fair and takes your future income needs into consideration.”
For help and advice on financial settlements and divorce proceedings, please contact us.