The gender pensions gap is estimated to be over twice the size of the gender pay gap. This widens in the event of divorce according to a briefing document published by the Government in April 2022.
The document suggests pension rights should be a compulsory part of divorce proceedings. Research from the UK’s largest family law firm Stowe Family Law supports this.
Stowe Family Law polled 400 women aged 35-64 around the UK to start to understand and help address the imbalance in the UK gender pensions gap.
Only 54% of the women polled have a private pension. Of those who don’t, 58% said it was due to them not earning enough to qualify. As the gender income gap widens, so does the pension gap.
At the start of women’s careers, the gender pension gap starts at 17% and reaches 56% at retirement. A women’s retirement wealth also only averages one-third of men’s. This is leading to many women facing retirement poverty.
In the event of divorce, this gender pensions gap widens. The survey found that 60% of women didn’t get a share of their ex-spouse’s pension as part of the financial settlement in their divorce, and 12% weren’t sure if they did.
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By GlobalDataThe survey also suggested women were relatively unaware of their spouse’s private pension. Of the respondents who were married women, 25% did not know whether their spouse had a private pension and 77% didn’t know the value of it. However, of the women with a private pension, 70% didn’t know the value of it.
Many women have a lack of awareness around how financially significant an asset a pension is. This can play heavily against them in the event of divorce.
Stowe Family Law partner Matthew Taylor says: “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.
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.”