'Silver Splitters' missing out on state pension rights following divorce in later life
Can you spot the deer in the photo? Fairly hard to see against the background. A little like what it is like when trying to wade through the ‘complex and little understood system’ of pensions following divorce.
This applies not just to private pension splits or offsetting, but to state pension rights, for women in particular, following divorce and separation.
For some time there has been concern that women who divorce in later life may not get the state pension rights they are entitled to.
The Family Law Gazette has stated that: ‘Tens of thousands of women who divorce later in life may be missing out on huge sums in state pension rights because of a complex and little understood system.’
This is according to analysis from the financial consultancy LCP.
LCP explain the problem in this clear way: ‘During 1998 to 2018, more than 100,000 women aged 60 or over divorced according to figures from the Office for National Statistics. The vast majority of these women reached state pension age before 6th April 2016 and come under the ‘old’ state pension system which makes significant provision for divorced women. But if they divorce after pension age they benefit from a pension uplift only if they notify DWP of their divorce. There is worrying evidence, that many may not be aware of this or are deterred from doing so.’
We recommend always getting advice on pensions following divorce or separation; as the new report shows, this can directly impact your finances and income. Many do not look at pensions following divorce and this can be one of the biggest financial assets, an aspect that should not be overlooked.