Modelling done by Nest the workplace pension scheme, has recently revealed that based on the average UK wage which includes part-time work, the gender pension gap at retirement for pension funds is as much as £72,500 against women.
Women face extra challenges when saving for retirement, such as a greater proportion working in lower paid and part-time jobs, which mean that they have less to put into their pensions.
Women are also less likely to plan for retirement and surprisingly, only 14% of divorce settlements include pension sharing, leaving women more vulnerable to financial hardship.
If you are divorcing, the pension assets can be one of the most valuable if not the most valuable, assets in the marriage. Every divorce case, unless the marriage has been very short and the parties are very young, should include a consideration of the pensions. Either party, not just wives, can risk losing out on their fair share of a valuable asset if you don’t find out exactly what it is worth and include it together with the family home and other capital, for sharing.
It may be tempting to cut corners and save costs by not instructing professionals in a divorce, but you could end up losing tens of thousands of pounds as a result of such false economy. Family Law specialists will be able to advise you on the value of pensions, which is particularly important if they are final salary/defined benefit schemes, and arrange a pension actuary report if needed.
Yes this is all extra cost, but even if it’s 20 plus years away in the future, providing for your retirement is important financial planning that should not be neglected. Consult a family law specialist for further advice if this affects you.