Warning for thousands of divorcing women who are missing out on slice of £4billion pot – how to avoid it

THOUSANDS of women are missing out on up to £4billion a year by ignoring their ex’s pension, new figures provided to The Sun show.

A change to the law in 2000 meant pensions would start being included as part of a divorce settlement, but last year only around 30% of splitting couples opted to do so.  

Women could be missing out on between £1.8billion and £4billion a year, according to estimates by the Institute and Faculty of Actuaries (IFoA) and Scottish Widows.

Divorce settlements can be complex and some large assets such as property, and other investments and savings are also split.

Lawyers say women will often not want to include the pension because they don’t understand it, or mistakenly believe it will financially tie them to their ex.

Bhavna Radia, a former family solicitor and founder of the Divorce Lounge, said the women she advised were often scared to ask their ex about their pension.

“Women are worried it will make them look greedy," she said.

“Also a lot of women aren’t aware that they can have a share of their partner’s pension but have a clean break, so they don’t need to be tied to their ex.”

A family law solicitor, who didn’t want to be named, added: “I have sat down with clients and pleaded with them to consider looking at their spouse’s pension.

“I managed to persuade one woman who was going to settle for the family home - which was worth around £200,000, to consider a pensions splitting order.

“So we managed to go for a pension splitting order with her husband, a mid level civil servant, who had saved over £1million in his pension during their 20 year plus marriage.” 

Vix Munro, a financial coach and founder of Retire Rich, added: "Women get attached to the family home when they would be better selling it, or taking a share of their ex’s pension.”

There were around 120,000 divorces in the UK in 2022 - including England, Wales, Northern Ireland and Scotland -  a figure the IFoA said was increasing among those aged 65 and above. 

The IFoA estimated 60% of divorces did not include the pension, meaning around £1.8bn a year was not being split.

A study by the University of Bristol and the Nuffield Foundation also found more than a third of divorcees did not know how much their pension savings, or their partner’s pension savings were worth. 

Scottish Widows also provided an estimate for The Sun which came in at around £4 billion.

The pension provider estimated women who divorced later in their working life could miss out by £77,000 in their pension pot at retirement.

Samantha Gould, head of campaigns, NOW: Pensions which also worked alongside the IFoA said: “Pensions are often the second most valuable asset after a home, but we see that property is often the greater focus during the divorce process which leaves divorcee’s asset-rich but cash-poor.”