Those who are divorcing are being urged to take financial advice, as women end up with less than half the property wealth of married couples and less than one third of the average pension wealth, according to research.
Royal London, which analysed the data from the latest Wave of the Wealth and Assets Survey (WAS), undertaken between 2014 and 2016, concluded the average divorced woman aged 50-plus has a pension wealth of £131,000 compared with £454,000 for the average married couple.
The mutual insurer is encouraging those going through a divorce, and those who advise them, to ensure pension wealth gets the same attention as more tangible household assets such as a family home.
Understanding the true value of a pension can be a complex business, but if people are put off because it is seen as too difficult, they risk missing out on a fair share of highly valuable assets of the household, it noted.
The research also concluded that divorced women don’t make up for a lack of pension wealth by accumulating greater housing equity.
The average married couple aged 50-plus has double the housing wealth of the average divorced woman of the same age, £359,000 for married couples compared with £169,000 for divorced women.
According to Sir Steve Webb, former pensions minister and director of policy at Royal London, when couples split up there is an understandable focus on family issues and on highly visible assets such as the family home.
He said: "But very often one partner will have pension rights which are less visible but can be just as valuable and people need to take expert financial advice on this crucial issue.
"For example, someone with long service in a final-salary type pension can have rights worth hundreds of thousands of pounds which can be a crucial part of a fair divorce settlement."
Sir Steve argued that changes to legislation implemented in the early 2000s designed to make it easier for couples to share pension rights “are failing to deliver equality”.
“Divorced women are ending up as the poor relations when it comes to pensions wealth in later life,” he argued.
Research recently published by Age UK shows that 70 per cent of couples do not discuss their pensions prior to divorce and 40 per cent of women aged 55 to 70 were dependent on their partners' income for a decent retirement.
Gem Durham, independent financial adviser at Obsidian, said that people tend to only seek financial advice after the divorce – when it is too late.
She said: “A lot of solicitors are up to speed, but many of them still really need educating in the value of pension assets.
“Unfortunately, many solicitors still see IFAs as non-professionals and sales people, rather than experts who can help them with the process.”
maria.espadinha@ft.com
