While factors such as the gender pay gap, women taking career breaks to care for others, and the auto-enrolment thresholds mean many women accrue smaller pensions, divorce can also be a “key fault line”, according to new research.
Recent Legal & General research, reported by publication PensionsAge, found that women’s financial futures are often at risk following divorce, as women see their household income fall by 41% per cent following a split, compared to just 21% for men.
The report also revealed that just 12% of couples consider their pension as part of divorce proceedings. Moreover, women were also significantly more likely to waive their rights to a partner’s pension as part of a separation, with 30% of women confirming this compared to 17%.
Commenting on the findings, Rita Butler-Jones from Legal & General said:
“Disentangling finances when a marriage ends can be painful for all concerned. But just as we’ve seen with gender gaps in pay and pensions, there may be particular jeopardy if you’re a woman.
“These findings tell us that divorce is a further key fault line in exacerbating the gender pensions gap. We would encourage anyone who is going through a divorce to consider the joint value of pensions as an important financial asset in any equitable split.”
Despite the benefits of financial planning on divorce, the report found that only 7% of those going through a separation seek independent financial advice.
After the experience, many women suggest they regretted their decision to not seek professional guidance, with one-third (31%) saying they’d be more likely to turn to an adviser in future.
