Recent research has shown that the number of people claiming against their spouses’ pensions in divorce proceedings has increased in the last year, an increase of around 11%.
The legislation allowing for pension sharing was introduced in 2001 and the number of claims was initially low. Prior to the change in law, claims were dealt with by allocating other assets instead of the pension.
So what has prompted the rise in people staking a claim to a percentage of their spouses pension? The recession is almost certainly partly to blame. House prices have fallen, savings have reduced and the available cash to “buy out” a pension claim may no longer be available. Women are also becoming more financially savvy now, with more experience from having their own careers and pensions, compared to women from just a few decades ago.
A further reason is that although marriages are generally surviving for shorter periods now and the ratio of couples splitting up in later life has increased. These are the people who have had time to save for their pensions.
If you are divorcing, whether you are the holder of the original pension or the receiver of the pension sharing order – it is vital that you get good legal and financial advice to ensure you have a fair share. It is important to value pensions properly and assess the suitable sharing order in detail, which are both complex issues.
For more information please contact a member of our Family team on 01625 442100.