Divorcees lose £337m by forgetting pension

Many women fail to claim their share of pot in break-up

IT can be one of the most traumatic experiences in life, with husbands and wives spending months dividing their possessions and organising custody of their children.

But a new study shows women in Scotland are forgetting one aspect of divorce proceedings – and losing out on £337million a year.

Scottish Widows research shows women getting divorced are missing out on the windfall because pensions are not considered during break-up proceedings.

Seven out of ten couples in the country would not take the payments into account when separating, leaving women ‘shortchanged’ by hundreds of millions of pounds.

And the research reveals just 9 per cent said they would want a fair share of any pensions, despite the average married couple’s retirement pot totalling £109,000.

Catherine Stewart, retirement expert at Scottish Widows, said: ‘Generally speaking, women’s retirement prospects are worse men’s. The persistent gender pay gap, maternity leave and career breaks can all hold back women’s earning potential and this often impacts pension savings.

‘Relationship breakdowns can leave people really vulnerable but, quite simply, they’re also throwing significant sums of money down the drain.

‘It is important that everyone – whether single, married or divorced – take steps to understand their finances and prepare for their independent future should a relationship break down. We would urge men and women to better understand the legalities around what happens to pension pots during divorce proceedings as often they are the secondthan largest, if not the largest, asset a couple owns.’

The survey shows women are less well prepared for retirement than men in Scotland, with only 49 per cent saving adequately for the future compared with a figure of 69 per cent for men. Furthermore, 43 per cent of women say their retirement prospects would become worse after a split, compared with just 28 per cent of men.

Advice from Scottish Widows says the matter can be dealt with in several ways during divorce, with the starting point being to find out what pensions there are, what are they worth and how they fit with any other assets.

If an adjustment needs to be made to get a fair outcome after separation, this can be done by one person keeping their payments but the other getting more of other assets.

Alternatively, the court can make a sharing order giving a percentage of one person’s pension to the other, while a combination of the two methods is also an option.

The research shows half of married people would fight for a fair share of any jointly-owned property and 32 per cent would want to split their combined savings.

The study was carried out online by YouGov across 5,314 adults in April, with additional research by Opinium across a total of 5,000 adults in September.

‘Money down the drain’