Following a major piece of research by The University of Manchester, it is suggested that financial settlements reached on divorce must be reformed to make their pension-sharing elements fairer.
The research reveals huge gaps in pension wealth between men and women, finding that men aged between 65 and 69 have more than six times the pension wealth of their female partners, with men having (on average) over £212,000, and women only £35,000.
Further, men aged between 55 and 64 have more than three times the pension wealth of married women of the same age according to the peer-reviewed report by the Manchester Institute for Collaborative Research on Ageing and the Pensions Policy Institute.
In 2000, the law in England and Wales changed to allow pensions to be shared as part of a financial settlement on divorce. Recent statistics show, however, that only 12% of divorces result in any pension sharing.
Very often, women are focused on maintaining the matrimonial home on divorce and are willing to make other sacrifices in the financial settlement, including a possible pension share, to ensure they get this.
It may also be the case that the person with the larger pension, traditionally the man, does not want to share this, and is happy to substitute other things in the financial settlement. This is supported by research showing that men have emotional attachments to their pensions.
Frances Hipperson, Partner at BP Collins LLP, believes that a solicitor’s role is to ensure any financial settlement reached on divorce supports both parties not only now, but also in the longer term. This is why pension-sharing elements of financial settlements on divorce are so important, as they allow for better overall stability and fairness.