Everybody makes mistakes. These can range from poorly thought out but small and insignificant decisions too much greater ones with much more impact (like breaking your wedding vows). Still, in the midst of all the turmoil that can be brought about by an impending divorce, could it be that many women are getting the shorter end of the retirement stick? According to Age UK, women not knowing the value of their husband’s pension could lead to some detrimental consequences for them. They should then be given the right to see the size of their ex-spouse’s pension pot. The charity stated that thousands of divorced women are being left worst off in retirement, simply due to the fact that they are unaware of their legal entitlement to their husband’s private pensions as a part of the divorce process. As of now, couples going through a divorce that end up settling finances out of court do not undergo any automatic right to know their spouse’s pension value, nor is there any requirement that pensions must be split as part of the settlement. According to research by Scottish Widows, seven out of ten couples do not discuss their pensions at all prior to divorce. This ultimately results in women missing out on substantial sums, without even realising it in many cases. Age UK is currently attempting to stop women from being shortchanged, by calling for the Government to tweak the law so that private pensions must be considered as part of the divorce process and wherever possible, divided fairly between spouses. You may be wondering what the big deal is with regards to husbands’ pension pots and what any of this has to do with equality. Well, according to official data from the Office for National Statistics, men who are approaching retirement at age 55-64 have median pension wealth of £125,000, which is about three times as much as women of the same age, who only have a median pension wealth of £42,300. It doesn’t help one bit that divorce rates are through the roof, with as many as one in three women currently aged between 55-70 years have experienced a divorce. “It is extraordinary and frankly unacceptable that so many women are potentially missing out on significant sums of money when they divorce, sometimes without even realising they have lost future income which probably should have been theirs.” Age UK’s charity director, Caroline Abrahams has said. "The Government must act quickly to make consideration of private pension wealth a proper part of the divorce process. “If we are serious about gender equality in our society it’s high time this changed. It is crucial that women are helped to build up a decent private pension, get the right information and advice at the right time, and as a matter of law and practice have fair and equal access to the private pension wealth they have built up with their husbands if they are divorced or bereaved later in life.” she continued. Among other things, the Age UK report also raised concerns about older women’s pension prospects, pointing out that unlike the old state pension system, women retiring on the new state pension (from April 2016) have no provisions to claim based on their spouse or civil partner’s contributions. This may specifically be a challenge for women who are approaching state pension age but haven’t yet built up their own full contribution record. These women were hoping to be able to claim on their husband’s record in the event of bereavement, the report included. It had also warned of the dangers from the Government’s pension freedoms, which may leave women even worse off than men. Women generally outlive men, which means that they will have to face the possibility that they are likely to live longer but have a smaller pension to use. Now, imagine having to carefully manage your retirement pot under tight circumstances just to make your money last in your old age.
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