Pensions Often Overlooked in Divorce
02/01/2018
Over the last decade the overall divorce rate has fallen, but a surprising statistic is the rise in the number of people over 60 who are splitting up.
Between 2000 and 2015, the total number of divorces in England and Wales dropped 28% from 141,135 per year to 101,055. Yet the number of divorcing couples over the age of 60 shot up by 43% (from 9,997 to 14,249).
Reasons for ‘silver splitters’ are numerous, but there’s a view that as people are living longer, they’re looking for more from life. Equally, the stigma of divorce has faded, so separating from a partner is no longer the daunting proposition it may once have been. Also, more people than ever are more likely to work beyond retirement making the idea of supporting themselves outside marriage more conceivable.
A divorce at any age is difficult, but it can become much more problematic with older couples who have more assets and pensions that come under scrutiny when they part company.
Research carried out by Scottish Widows showed that seven out of 10 couples separating didn’t discuss pensions during divorce proceedings. In particular, this can have a huge impact on women who perhaps have taken maternity leave, had career breaks and may have suffered as a consequence of the gender pay gap.
The starting point for a fair split is to find out what pensions there are between the parties, identify what they’re worth along with any other assets, such as property and savings. From there, an agreement can be worked out as to who gets what.
Depending on the circumstances of a split, there are a number of ways assets can be divided and a good solicitor will outline this clearly and transparently. For example, a couple can ‘offset’ assets against each other so that one party keeps the pension while the other gets a larger share of the other assets.
Alternatively, courts can make a pension sharing order, giving a percentage of one person’s pot to the other partner. Again, a good solicitor will explain this in plain English. Pensions are very complex and it may be appropriate to obtain an expert report on the issue from a Pension Actuary.