‘£77,400 worse off’: Women lose small fortune in pensions that ‘need to be shared’


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Women who have separated typically retire with savings a quarter the size of men on average, having just £26,100 worth of pension, compared to £103,500. Although pensions should be part of any divorce settlement, only one in 10 consider including it when sorting out who owns what.

Almost a third of women in their 60s say they would waive their rights to their partner’s pension during the divorce process, despite the long-term damage, according to new research from the Financial Vulnerability Taskforce, supported by Legal & General.

It found that divorced women were more likely to struggle in retirement, which is a real problem as more people separate in later life.

More than 100,000 couples divorce every year and the average age has hit an all-time high of 45 for women and 47 for men.

Yet just three percent seek financial advice as part of their divorce, while a quarter did not get advice or support from anyone.

Only one in six women realise that waiving rights to pensions places them in financial jeopardy.

They have significantly less pension in their own name due to the gender pay gap, taking career breaks to raise a family, or caring responsibilities that force them to take on part-time roles.

Cecilia Furner, retail annuities specialist at Legal & General, said too many women face “serious consequences and financial struggles” following divorce.

A pension is often someone’s largest and in many cases only form of savings. “It must be considered as part of the divorce process, in the same way as other assets such as a shared home,” said Furner.

This is particularly important during the cost-of-living crisis. “Taking financial advice at an early stage of the divorce process should help ensure the division of pension assets is fair and equitable,” Furner added.

Breaking up is easier to do under new no-fault divorce laws but couples must be rigorous about divvying up their assets, said David Gibb, chartered financial planner at Quilter: “It is easy to focus on the assets that you can see in front of you, such as the family home or prized possessions, and forget pensions.”

Couples have three main options when sharing pension assets. One is to offset pensions against other assets – one partner might stay in the marital home instead of receiving part of their ex-spouse’s pension rights.

Under a pension sharing order, retirement savings are divided at the divorce in a clean financial break.

Alternatively, with a pension attachment order, one partner’s pension provider pays an agreed amount direct to the former spouse when pension rights come into payment.

But Gibb warned: “It risks the loss of future income for the former spouse if they remarry, or if their ex dies before retiring.” This is a complex area and legal and financial advice is vital to ensure a fair all-around settlement, he added.

Jane Robey, chief executive at charity National Family Mediation, said divorce can be a very difficult time for everyone.

“It’s not uncommon for emotions to run high, especially when there are difficult conversations to be had around who gets what.”

People are understandably worried about their financial security both now and in the future. “Financial issues are one of the biggest reasons for fall-outs, and certainly one of the most common issues that we encounter.”

Robey said it is often a shock when people discover that they have to take into account pensions in divorce but added: “They form a key part of making full financial disclosure.”

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