DIY divorces risk leaving women worse off in retirement

Quick-fix DIY divorces risk leaving women in particular with less retirement income than they might have been entitled to, as they won’t have received legal help to clarify what they can claim. Current estimates suggest that the difference between the pension pots built up by men and women over their lifetime is 40.3%. According to the Pensions Policy Institute, by the time they reach retirement, the average UK man holds a pension pot of £157,000 compared to just £51,000 by women. Read more in our article Women and the gender pensions gap. 

A DIY divorce is, as the name suggests, one that is arranged entirely by you and your ex-partner. You still have to apply through the court in order to make the divorce official, but you may not have a pension sharing order in place. 

Melissa Markham, associate family and collaborative solicitor at Whitehead Monckton, said: “The rise in DIY divorces will undoubtedly leave, not just ex-wives, but ex-husbands vulnerable financially, and potentially with less on retirement than they are entitled to.  

“The problems I foresee are that they would go on to deal with financial matters themselves, reaching unsuitable agreements which do not meet their financial needs, or those of their children, as well as they should with legal advice. This could happen because parties do not fully understand their long-term and/or specific needs but could also be the result of an imbalance of power between the parties, forcing one party to agree to compromise their position to their detriment. 

“Pensions are notoriously complicated and are very often ignored when couples deal with their financial matters without legal advice. This can leave parties without any retirement provision when they should have received a pension settlement to support their financial needs long-term.”

When getting a divorce, there are several options for dealing with pensions, including pension sharing and ‘pension offsetting’, where the value of any pension is offset against other assets. For example, one of you may keep your pension in full, while the other receives another asset, such as the  family home.

Author: wpadmin

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