Women could be missing out on billions a year by failing to get a share of their spouse’s pension in a divorce.
New figures show that less that one in three splitting couples include pensions in their divorce settlements.
As a result, women could be missing out on billions a year, according to estimates by the Institute and Faculty of Actuaries (IFoA).
Women often significantly underestimate how much their spouse’s pension pots are worth upon divorcing, and ask for the matrimonial home instead.
However, legal experts at Stone Family Law have described this approach as “financial suicide in the long run”.
The firm argues that the gender gap on pensions – in terms of what women and men are putting aside to fund their retirement – is over twice the size of the pay gap for workers.
At the beginning of women’s careers, the gender pension gap starts at 17 percent, however it climbs to a staggering 56 percent at retirement. This is often because women have taken time out of the workforce to care for children.
As a result, women’s retirement wealth averages only one-third of men’s.
The firm said this is leading to many women – who live longer than men – facing retirement poverty.
Figures from Stowe show that a quarter of women do not know whether their spouse had a private pension, while 77 percent do not know the value of it. At the same time, only 54 percent of women have a private pension themselves.
The firm’s legal experts warned that as many as 60 percent of women do not get a share of their ex-spouse’s pension as part of the financial settlement in their divorce, while 12 percent are unsure as to whether they have.
Some 17 percent of women said they don’t have a private pension because they don’t understand them, while 70 percent of women who did have one did not know the value of it.
Matthew Taylor, Partner at Stowe Family Law, said: “At Stowe, it is extremely common for women to say that they want the matrimonial home in a divorce and don’t mind the husband keeping his private pension in full.
“This was backed up by our survey, which revealed that half of women aren’t convinced that they would consider the pension pot as an important factor in a financial settlement upon divorce.
“Financially-speaking, failing to take into consideration the pension pot during divorce proceedings is an unwise move – especially for women.
“We encourage women who are going through a divorce to think about the long-term financial ramifications of not seeking a share of their spouse’s pension.
“This is more important than ever, at a time when the cost of living is the highest it has been in 40 years.”
He added: “We must debunk the assumption that pensions are too complicated to be worth understanding.
“Women who receive a share of their ex-spouse’s pensions will reap the much-needed benefits later in life when so many women would otherwise be faced with retirement poverty.”
