Divorce and the pension gap facing women at retirement
New research highlights a significant imbalance in retirement outcomes for divorced women in the UK. The findings show that divorced women reach retirement with around 61 per cent less private pension wealth than divorced men. The research links this gap to lower lifetime earnings, career breaks linked to caring responsibilities, and the limited use of pension sharing during divorce.
For many women, this results in pension pots that fall far short of what they need later in life. The long term impact often only becomes clear as retirement approaches, when options to rebuild savings narrow.
Family Partner Anne-Marie Hamer says the research reflects patterns seen daily in family law matters.
“The data reflects what we family lawyers see in practice. Many men who are divorcing in their late fifties and sixties hold significantly higher pension values. Historic working patterns play a key role. Men were more likely to follow long, uninterrupted careers with steady progression. Women more often stepped away from work or reduced hours to manage caring responsibilities.”
These structural differences mean pensions frequently represent one of the most unequal assets at the point of separation.
Despite their value, pensions still receive limited attention during divorce negotiations. Anne-Marie notes that this remains a serious risk.
“Pensions are often the forgotten aspect of divorce despite being one of the largest assets in a marriage. Marriage is a partnership and lifetime commitment, and it is commonplace for one party to have amassed a greater pension than the other.”
In English and Welsh law, pensions built up during a marriage form part of the marital assets. Until a financial settlement concludes, both spouses retain an interest in those pension funds.
Accurate and complete financial disclosure plays a central role in achieving fair outcomes. Pension values can be complex, especially where defined benefit schemes or multiple arrangements exist.
“Full and frank disclosure is essential to equitable pension sharing in divorce proceedings. Until a financial settlement is reached, both spouses retain a vested interest in any marital pension pot.”
“As working and societal patterns continue to change, this gap should narrow accordingly, but it remains vital that pensions are consistently factored into divorce outcomes to reflect contributions to a relationship and ensure parity and with the instruction of experts identified at the earliest opportunity.”
As working patterns continue to shift, the pension gap between men and women may narrow over time. For now, consistent and informed treatment of pensions during divorce remains critical to reducing long term financial risk, particularly for women approaching retirement.
Read Anne-Marie’s comments in DIY Investor and Money Marketing.
