Less than one in eight divorces include a pensions split

Less than one in eight couples in England and Wales have shared their pensions in divorce over the past 6 years, research from St. James’s Place (SJP) has revealed.

The research found that, of the 602,491 divorces that occurred between the period of January 2016 and August 2022, 80,290 included a pension split between divorcees.

It also revealed that a lower percentage of divorces split their pensions in Northern Ireland, showing that splitting pensions occurred in fewer than one in 14 cases (7 per cent) in the same period.

SJP detailed that only 971 of the 14,274 divorces that were settled in court in Northern Ireland included a pension disposal by way of a sharing or attachment order.

Explaining the issue, SJP stated that “it is particularly problematic given that pensions are usually the largest or second largest investment a household may have”.

In addition, SJP noted the gendered problems the figures could create, as the impact of not sharing a pension could be more significant for women.

Pointing to data from SJP’s latest Financial Health, SPJ stated that women hold on average £85,500 less than men in workplace-based or privately organised pensions.

St James’s Place divisional director of retirement and holistic planning, Claire Trott, commented: “The importance of pensions when considering divorce should not be underestimated.

“There are many different options available to both parties with regards to financial settlements and the easiest option at the time may not be the right choice in the long run.

“Pensions in particular can’t just be considered a monetary asset and, taking into account things such as health and life expectancy, a 50/50 split isn’t going to give a fair outcome.

“This can be even more apparent if you choose to offset one asset against another. For example, exchanging the pension for the house. You need to be clear of the true long-term value of each.”

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