A study by a team from Cardiff University on the use of pensions sharing has revealed that pension orders are more likely to be made for ‘silver separators‘ – couples who are older and usually who have been married for a significant number of years. They usually have more assets and have more money saved in pension funds than younger couples.
Now that the government is trying to ensure that everyone is enrolled into a pension scheme though, pension orders are going to play an increasingly important part in financial remedy proceedings for couples no matter what age they are.
The researchers also discovered that pension orders were more likely to be made where both parties in the divorce were legally represented. Since more and more parties are now ‘litigants in person’ (since legal aid was reduced for family law cases last year), it may mean that people who don’t have access to legal advice and representation are missing out on crucial issues in regard to the division of pension assets in financial proceedings.
Another conclusion that the Cardiff team reached is that when it comes to pensions after divorce, wives are more likely to lose out. Husbands had better income and pensions than their ex-spouse and because the courts favour clean break settlements, fewer pension and spousal maintenance orders are being made but as a consequence, wives tended to fared better than husbands in the division of capital assets instead.
This study has highlighted that pension orders can be a significant factor in the outcome of financial remedy applications; so if you are going through a divorce it is an important issue to consider. Pensions can make up a significant part of any marital assets, but they can also be very complex. We would therefore strongly recommend that you take legal advice before you come to any financial agreement, especially where pensions are concerned.
The full report on this study can be found on the Nuffield Foundation website.