Divorced woman are struggling to make ends meet in retirement because they are missing out on a share of their former partner’s pension.
Despite tough negotiations about splitting other marital assets, like the family home, pensions are overlooked, says charity Age UK.
Often, any entitlement to the husband’s pension is ignored during the divorce, leaving the woman worse off in later years.
Now, the charity is calling for private pensions to become part of the financial settlement in a divorce as a matter of course, arguing the pension fund should be split fairly between couples.
Lack of savings
Research for the report ‘For love and money: Women’s pensions, expenditure and decision-making in retirement’ published by the charity reveals 40% of women aged between 55 and 70 years old depend on their partner’s pension to finance a comfortable retirement.
The report explains many women fail to save enough themselves because they take a break from working to raise a family or care for elderly relatives.
Currently, seven out of 10 couples do not discuss splitting a pension on divorce and spouses have no automatic right to know how much their partner has saved for retirement.
Age UK’s Charity Director, Caroline Abrahams, said: “It is extraordinary and frankly unacceptable that so many women are potentially missing out on significant sums of money when they divorce, sometimes without even realising they have lost future income which probably should have been theirs. The Government must act quickly to make consideration of private pension wealth a proper part of the divorce process.
Counting the pennies
“In recent years we have learned a lot about the way in which women born in the 1950s have been hurt by steep rises in the age at which they can take their State Pension; sadly our new report has found that many divorced women are also being unfairly disadvantaged when it comes to private pension provision too.
“The money many divorced women are currently going without could make the difference between having to count the pennies or being comfortably off in retirement, so this has huge implications for them.
“If we are serious about gender equality in our society it’s high time this changed. It is crucial that women are helped to build up a decent private pension, get the right information and advice at the right time, and as a matter of law and practice have fair and equal access to the private pension wealth they have built up with their husbands if they are divorced or bereaved later in life.”
