Why women lose out over pension if marriage ends

WOMEN getting divorced are risking poverty in retirement as they fail to make sure that they get a fair share of the pension pot, a study has warned.

They also end up with less than half the property wealth of married couples and less than one third of the average pension wealth.

A divorced woman, aged 50-plus, typically has a pot worth £131,000, compared to £454,000 set aside by the average wedded couple.

The average older married couple has double the property equity at £359,000, compared with £169,000 for divorced women.

Despite changes to legislation in the early 2000s designed to make it easier for couples to share pension rights, the study goes on to warn that women are still the “poor relation” when it comes to pensions.

Those going through a divorce must ensure that pensions wealth gets the same attention as the division of the family home. Understanding the true value of a pension can be a complex business, the report says, but if women are put off because it is seen as “too difficult”, they risk missing out on a fair share of a highly valuable asset and could be left poorer in old age.

Former pensions minister Sir Steve Webb, director of policy at Royal London which commissioned the study, said: “When couples split up there is an understandable focus on family issues and on highly visible assets such as the family home.

“But very often one partner will have pension rights which are less visible but can be just as valuable.

“Divorced women are ending up as the poor relations when it comes to pensions wealth in later life.”

Charity Age UK wants urgent reforms to the divorce process.

Director Caroline Abrahams said: “Many women are potentially missing out on significant sums of money when they divorce.”

She added that “sometimes, without even realising, they have lost future income which probably should have been theirs”.