People Getting Divorced Need Better Understanding Of Pension Issues, Experts Warn
By Rob Dixon
Family law experts have revealed their concerns that women going through a divorce may be missing out on a fair settlement due to a lack of understanding on pension issues, following new research released by a specialist fund consolidator.
The study by Phoenix Group found that 19 per cent of women polled stopped paying into a pension after a divorce, and 42 per cent considered themselves to be worse off financially following divorce.
It also found that “a staggering” 38 per cent of women who had pension arrangements in marriage did not know what happened to their pot after their divorce was finalised.
Only six per cent of those polled received a pension sharing order or an earmarking order following their separation.
Irwin Mitchell’s specialist Family Law team have said the research highlights worrying trends and that those going through divorce need to ensure they always consider all financial aspects when formalising the terms of a separation.
Alison Hawes, a Partner and family law expert at the national law firm, said: “Through our work, we often see cases where pensions are one of the biggest assets in the pot. It does tend to be the case that the pension is in the husband’s name, and the wife has relatively modest provision if she has not worked outside the home, but been the main carer for the children of the family
“However, this study shows that some people run the risk of missing out on what they are entitled to – and need - by simply failing to get a full and proper understanding of the key issues related to them.
“We would urge couples to ensure that the future of a pension pot takes priority in their discussions over splitting finances in the event of a divorce. As these figures highlight, an oversight could mean that an even and fair decision is not made, leaving one of half of the couple facing a difficult future reliant purely on state provisions. The court has powers to share pension provision on divorce and it is a specialist and complex area.
“It is also important that those who have already gone through a separation take time to consider this issue and seek advice over any concerns they may have. This may help them to avoid any unexpected surprises as they head towards retirement.
“Here at Irwin Mitchell, we have expertise and experience in pensions issues and can support those going through divorce to ensure that any settlement takes the parties’ pensions fully into account, and gives both parties economic security for the future.”
Read more about Irwin Mitchell's expertise in relation to Divorce