NOT SO EQUAL SHARES: A RENEWED FOCUS ON DIVORCE AND PENSION DIVISION 

Published on 09 April, 2025 | Sarah Hewitt

“All is fair”, it is said, “in love and war”.

When it comes to the divorce process itself, fairness is the absolute objective of the family courts.

However, new research has suggested that the impact of a marital split has greater impact on women than men.

The study was conducted by the financial services company, Legal & General.

It found that ex-wives see their incomes cut in half in the months which follow a divorce due, partially, to the need to cut their working hours because of childcare responsibilities (https://group.legalandgeneral.com/media/pksbrdw3/the-divorce-gap-women-see-their-household-income-cut-in-half-in-the-year-after-a-divorce.pdf).

Furthermore, it outlined how women were more likely than their male counterparts to “waive rights to a partner’s pension” – something which poses the potential of financial difficulities in retirement.

It is a worrying scenario but, I would say, is not exactly new.

Pensions have long been recognised as often being the largest single asset for consideration by separating spouses after their family home but, as the President of the Family Division of the High Court, Sir Andrew McFarlane, they have “all too often not had the attention they deserved in the fair division of assets on divorce”.

Back in 2017, his predecessor, Sir James Munby, was instrumental in the setting up of a body – the Pensions Advisory Group (PAG) – because of concerns about how funds set aside and invested for retirement by spouses were being treated during divorce.

The Group’s first report followed two years later but, despite being regarded as having “been very influential in driving a real and positive change”, there was still plenty of evidence that even more needed to be done.

In 2023, a paper produced by academics at Bristol University discovered that many separating spouses were jeopardising their respective futures by sorting out their finances – including housing, pensions and ongoing maintenance – themselves without taking legal advice (https://www.bristol.ac.uk/law/news/2023/fair-shares-upon-divorce-report-professor-emma-hitchings.html#:~:text=Only%20one%20in%2010%20divorcees,pot%2C%20let%20alone%20their%20spouse’s.).

The Bristol publication was just one reminder of the residual “unwillingness to tackle pension issues on divorce” and, last year, led to updated guidance from the PAG (https://www.nuffieldfoundation.org/wp-content/uploads/2023/A-guide-to-the-treatment-of-pensions-on-divorce-2nd-edition.pdf).

That new PAG report highlighted how the failure to obtain proper advice about pension sharing “can be immense for either party”.

The report’s authors said that they hoped it would help those dealing with the delicacies associated with pensions on divorce – “legal practitioners, financial experts, and judges” – to understand those issues and avoid the potential pitfalls.

In that sense, I would like to think that, as upsetting as the Legal & General research may be for many people, it is not all bad.

The online interviews on which its conclusions were based took place last October and November, only months after the second PAG report saw the light of day.

Just like the first PAG document, it aimed at contributing to shifts in awareness and practice.

As we have seen in other areas of family law, that can take some time to accomplish, regardless of strong support.

Take, for instance, the incremental increase in adoption of pre-nuptial agreements by couples intending to marry since a landmark Supreme Court ruling in 2010 (https://www.supremecourt.uk/cases/uksc-2009-0031).

There are many individuals, myself included, who would wish progress related to pensions to be effected rather more rapidly.

Until a more thorough understanding of how they should be regarded as an asset to be routinely shared comes about, the importance of obtaining professional advice – from family lawyers acting in concert with financial experts – cannot be understated.

The “divorce gap” identified by Legal & General clearly has very real consequences for those involved.

We should hope that its research represents merely a snapshot of a situation which is already in the process of being corrected thanks to the efforts of the PAG, family lawyers and the financial services industry.