Women's pensions are most affected after a divorce

Divorced women retire a quarter of the size of men, but separations are a financial burden on both genders, new research shows.

Women who separate from their partners retire with savings of around £ 26,100, while divorced men have £ 103,500 if they stop working.

This is significantly below the £ 51,000 and £ 156,500 that non-divorced men and women retire on, according to the study published by NOW: Pensions.

The numbers underline the enormous gender inequality in pension assets, but show that divorced women do the worst financially.

Post-separation finances: Divorce couples often prioritize the sharing of property and savings before thinking about pensions

The amounts for the size of the pension pool at 65 are the median, the center point, figures from the survey of the Understanding Society, which includes 40,000 households and around 4,000 pensioners.

The study, which was funded by the Economic and Social Research Council and a consortium of government departments, was analyzed by the think tank of the Pensions Policy Institute on behalf of NOW: Pensions.

"For divorced women, the division of wealth during divorce and the high prevalence of pension wealth, which is not included in this process, is the main obstacle to achieving adequate retirement results," says NOW: Pensions.

"In addition, divorced women save twice as little for retirement as divorced men."

NOW: Pensions believe that the coronavirus pandemic could worsen women's chances of doing something for old age as they have a greater impact on employment and divorce rates are increasing.

Do you want to get a divorce but can't afford a lawyer?

Twelve ways to cut, postpone, or pay your attorney fees when you have little or no money. Read more here

According to the company, figures from the Institute for Fiscal Studies show that mothers have lost or quit their jobs permanently and one and a half times more often since the block began.

“Together with many women who take on more childcare due to kindergarten and school closings, this means that they work less and earn less.

"All of this helps reduce how much you can pay into savings and a pension, how much employers top up, and how much tax relief your savings get."

"Since the beginning of the ban, the increase in divorce rates during this period compared to the previous year means that even more divorced women are victims of the gender pension gap."

“Now people should look at pensions more than ever and recognize them as assets throughout the divorce process.

Divorce couples often value sharing property and savings before thinking about pensions, although they are usually the family's second most important asset after owning a home.

Women are most likely to be penalized for saving less for retirement than men, as wage differentials and time off for bringing up children affect their ability to care for old age.

Anecdotes also suggest that women primarily keep the family home to provide stability to children without worrying about pensions because they do not fully understand their value.

A decent divorce lawyer should encourage clients to discuss pensions through a settlement.

However, over the past year, legal experts have noticed a widespread lack of trust among colleagues in their division and a significant proportion of unfair results.

How to fairly divide pensions in a divorce if you're not fabulously rich

Top lawyers have addressed this issue in a legal guide published last year. Read more here.

The Pension Advisory Group of Experts created a good practice guide to remedy this by promoting demystified and fairer comparisons of pensions. See the box on the right.

The small amount of sometimes contradicting guidelines that were previously available was mainly aimed at big money divorces.

Joanne Segars of NOW: Pensions says: “Our extensive work on the gender gap shows that women who are also part of other underpriced groups, such as B. divorced, will have an increased impact on their savings for later life.

Phillips Way, partner at Mills and Reeve, says: & # 39; The study commissioned by NOW: Pensions sheds another crucial light on the negative financial impact of divorce on women.

“Women who are thinking about divorce need to make sure they are aware of their own and their husband's pension savings and their likely retirement income.

“For many it is too easy to concentrate on the here and now, which are often stressful circumstances.

"For example, many women have found that they have put themselves in a poor financial position for the long term by keeping the house in divorce proceedings and not carefully reviewing pensions."


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