Half of women have no plan for pension in divorce

Half of women have no plan for pension in divorce

More than half (56 per cent) of married women don’t have arrangements in place to protect their pensions in a divorce, research has shown.

The study from Fidelity International – which polled 2,000 UK adults on discussing financial subjects with their partner – found men were similarly unprepared, with 60 per cent admitting they don’t have plans in the event their marriage breaks down.

According to data from the Office for National Statistics, there were 101,669 divorces of opposite-sex couples in England and Wales in 2017.

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According to Fidelity the woman typically suffers the most in heterosexual divorces - often being the party with fewer financial assets.

According to the latest data available from the ONS wealth and assets survey, undertaken between 2014 and 2016, the average divorced woman over the age of 50 will have a pension worth about £131,000, three times less than the average married couple of the same age, at £454,000.

A woman may be entitled to claim a portion of their spouse’s pension in a divorce if, for example, their husband’s work or family life had impacted their own ability to undertake full time employment. 

And according to the research, one in ten (12 per cent) married women planned to rely on their spouse’s pension during retirement, while 17 per cent had no pension of their own.

FTAdviser reported in May that the increase in the average age of people getting divorced was leading to more complex financial settlements, including disputes over pension pots.

Emma-Lou Montgomery, associate director at Fidelity International, noted that giving proper thought to how divorce could affect the retirement income was an essential part of the negotiations.

She said: “Having a plan in place for your pensions is imperative and it’s concerning to see these figures showing just how unprepared married couples are when it comes to their long-term finances.

“Ensuring you’re financially independent, both now and potentially in the future, will mean you are prepared no matter what happens.”

Ms Montgomery stressed this was particularly crucial for women, who were still more likely to take time off work to begin a family than men.

She added: “Taking a career break can easily put you at a financial disadvantage and overreliance on a partner’s pension in the future leaves you vulnerable, should the worst happen.

“Aside from making arrangements early on to ensure both parties are protected, partners who continue to work can also help boost their partner’s pension by making contributions for them during any time off work.”

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