Thousands of women going through divorce could be losing out on significant sums of money in retirement because they are unaware of a legal entitlement to their ex’s private pension, Age UK has warned.
During a divorce, pension assets frequently get left out of settlements, leading to one partner – often the woman – being made worse off than they could or should be in later life says the charity.
Currently, divorcing couples who do not go to court get no automatic right to know their spouse’s pension value at divorce.
Previous research from Scottish Widows shows that seven out of ten couples do not discuss their pensions at all prior to divorce.
Up to one in three women currently aged between 55-70 years have experienced divorce, with huge implications for their retirement incomes, Age UK says.
To stop women losing out, Age UK is calling for urgent reforms to the divorce process so private pensions are split fairly.
Age UK’s charity director, Caroline Abrahams, says: “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.
“It is crucial that women are helped to build up a decent private pension and get the right information and advice at the right time. Women should, 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.”
Age UK also highlights additional concerns for women in retirement following state pension reforms. It says that unlike the old system, women retiring on the new state pension from 2016 onwards will not have provisions to claim based on their spouse or civil partner’s contributions.
This could cause problems for women approaching state pension age who have not built up their own full contribution record and had expected to be able to claim on their husband’s record in the event of bereavement.