Displaying items by tag: divorce

A study for wealth manager St James’s Place has revealed major regional differences in pension sharing on divorce, some of which could negatively affect women.

Easier divorce rules have fuelled a jump in online applications from couples splitting with this set to continue, a Freedom of Information request has revealed.

One in five (19%) of divorcees will be significantly financially worse off in retirement because of a divorce, according to a new report.

Divorce was the second biggest cause of a derailment of retirement plans according to the Great British Retirement Survey, but financial advice is often not taken during divorce proceedings.

The latest data suggests that only 14% of divorcees are splitting retirement assets when they break up, according to a national wealth manager.

Wealth manager Quilter says that many divorcing couples may be missing out on a valuable benefit as a result.

With relaxation of divorce rules on the way the company believes more people may choose to divorce without seeking financial advice and will lost out as a result.

The company, which includes Quilter Financial Planning, says it is possible some divorcing couples may be choosing alternative arrangements, for example where one party keeps their pension but relinquishes the family home, but this still ignores the possibility that a retirement pot may be the most valuable asset.

Quilter has looked at the latest figures from the Family Law Courts. These show that there were 118,408 petitions filed for dissolution of marriage in 2018, but only 14% contained “some sort” of pension settlement order.

This is despite a recent trend in people getting divorced later in life, it says. According to the Office for National Statistics, the median age of divorce for men and women has increased by 10 years between 1987 and 2017, says Quilter.

As people divorce later, this group has less time to build a retirement income if they did not have a pension of their own, meaning dividing this asset could be key to avoiding “pension poverty”, says Quilter. ONS data shows that 45% of women aged 65 or over have no private pension wealth. 

Since 2015 the use of pension attachment orders has increased by 61%, while pension sharing orders have risen by 41%. However, while both types of pension orders have increased in popularity, they still represent a relatively small percentage of total divorce cases, says Quilter.

Source: Quilter

Jon Greer, head of retirement policy at Quilter, said: “Divorce is an emotional and stressful period for those who have to go through it. However, it’s important that people think of these valuable assets when considering how they split their money. This is particularly problematic given the average age of divorcees and it is more likely that a woman will not have any sizable pension of their own.

“With rules around divorce potentially becoming more relaxed in the future via no-fault divorce laws, we could see a further increase in do it yourself divorces where specialist advice is not sought. This could see many miss out on important pension benefits.”