The Problem of Pension Inequality when Divorcing

We know that adding pensions into the complications of divorce can seem daunting, however not addressing it could be a huge financial mistake.

Divorce can be one of the most stressful and emotionally painful times a couple can go through, and it is easy to let things go or miss things when you are trying to get through it as quickly as possible. Something that can lessen that stress is being prepared and knowing exactly what it is you are entitled to from the get go, that way you are equipped with the correct information in order to negotiate intelligently. 

We know that adding pensions into the complications of divorce can seem daunting, however not addressing it could be a huge financial mistake.

A collaborative report by The University of Manchester and Pensions Policy Institute actually found that there can be significant inequality when it comes to splitting pensions during a divorce settlement. 

In order to produce significant data, researchers for the report analysed the pension wealth of almost 30,000 individuals over the age of 30. The results showed that married men have the greatest wealth, with those aged 40-45 having ‘a median pension wealth of about £86,000’ compared with only £40,000 for women. Men aged 55-64 had a median wealth of £185,000 compared with £55,800 for women. The gap gets larger when it comes to those aged 65-69 where the median pension wealth for men of this age is just over £260,000 and just £28,000 for women. 

The data then showed that even though around 90% of couples have some pension wealth between them, the split is uneven with about half of the couples revealing that one partner has more than 90% of the pension wealth. The report also stated that fewer than 15% of couples have equal pension wealth. 

There is clearly potential for pension sharing in divorce, which could have a huge positive impact on women’s finances later in life. There is much to consider when it comes to pension inequality, and no matter the situation it shouldn’t prevent either individual from claiming their fair share of what they have put into the relationship. 

When it comes to divorce it is seen as only right that the things of value within the relationship are divided evenly such as any property or savings and this should also extend to pensions. The law actually states that the value of all pensions held by both partners must be considered upon divorcing, this includes both state and private pensions.

There are various reasons why pension wealth may not be equal, for example if the couple has children then perhaps one half of the couple worked full time building their pensions benefits whilst the other worked part time but perhaps bringing up the children and running the household. Even though the second person worked part time, without their support the other half of the couple would not have been able to work full time and build up pension wealth.

If you, or someone you know, is facing divorce, be sure that pensions aren’t left out of the negotiations. It is a requirement that they are included. Once you know what the financial assets are, you can then start considering, along with the help of professionals, which assets should be split how. It is rarely as straightforward as apportioning the agreed percentage between each partner. Different pensions offer different types of benefits and provide value in ways that may not be immediately obvious. Using a pensions specialist in your divorce planning can help you achieve the best outcome in the negotiations.

At Eva Wealth we help women to understand their financial position and offer expert advice and support when it comes to divorce. If you want to know more about this subject you can find the full report mentioned here and Advice Now have produced a free guide to Pensions on Divorce which you can find here. Get in touch with us on 01935 315611 or via

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