Recent research by Scottish Widows has discovered that 7 in 10 of divorcing couples do not consider pensions during divorce, leaving people with inadequate pension provision on retirement.
The research showed that people do not know what the options are for pension sharing on divorce, in some cases not even realising this is an option. The possible result is therefore that one party to the marriage walks away with a settlement that does not continue their future needs as well as their present needs, leading to problems on retirement when insufficient pension provision is available to them.
The researched showed that 10% of the divorcing couples studied would be left reliant on the State Pension alone.
When dealing with the financial aspects of separation, pensions can be an important aspect of a settlement, with pension funds often worth a significant amount of the overall assets of the divorcing couple.
There are a number of options for divorcing couples to deal with pensions, including sharing the pension to provide both parties with an income on retirement. The starting point is always to investigate the pension funds available before considering the best way to deal with those funds. This is dealt with alongside all of the other assets and liabilities the parties have, to reach an overall settlement.
These can be complex issues to resolve and we would always recommend obtaining legal and also financial advice on pension provision prior to any settlement being reached.
If this is an area you are concerned about, please contact our Family Law team, headed by Angela Green, to discuss matters further.