Retirement is often a financial mess for women who save less and are short-changed in divorce deals.
Fewer women have retirement savings – half against six out of 10 men, while a quarter of women confess they save nothing.
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Three out of four women do not include a spouse’s pension in a financial settlement of a divorce and this costs them around £5 billion a year in retirement income.
The shocking figures come from research by life and pensions giant Scottish Widows.
Although 56% of couples squabble over who gets what from the jointly owned property and more than a third want a fair share of savings, fewer than 10% include cash from pensions in any divorce settlement.
More concerns over pets than pensions
Doing in so, 90% of women overlook an average pot of £132,000 – and more are worried about handing over rights to a pet (13%).
The research found that 48% of women have no idea what happens to pensions in a divorce. A fifth believe the owning partner keeps the money and 15% consider they are split equally whatever the circumstances.
The reality is a divorce judge will want to know the value of the pot and may adjust the rest of the settlement, such as shares in the matrimonial home to offset one partner receiving more money than the other.
The court can also make a pension sharing order to split the pot – but this happens in only 11% of divorces.
Expats with QROPS pensions are exempt from pension sharing orders because UK courts do not have jurisdiction over offshore pension providers.
Throwing money away
Catherine Stewart, a retirement expert at Scottish Widows, said: “Women’s retirement prospects are worse than men’s. The persistent gender pay gap, maternity leave and career breaks can all hold back women’s earning potential and this often impacts pension savings.
“Relationship breakdowns can leave people vulnerable but, quite simply, they’re also throwing significant sums of money down the drain.
“It is important that everyone – whether single, married or divorced – take steps to understand their finances and prepare for their independent future should a relationship break down. We would urge men and women to better understand the legalities around what happens to pension pots during divorce proceedings, as often they are the second largest, if not the largest asset a couple owns.”
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