October 30, 2020 | less than a minute read

Wasted pension opportunities

Get in touch

Conrad Adam

Partner - Family & Divorce

Get in touch

Conrad Adam

Partner - Family & Divorce

There was a time when pensions were sometimes the largest asset in a divorce. I recall a case I dealt with where the husband's pension had a transfer value of £7.5m.

Lifetime allowances have put paid to such large sums but what is often overlooked in many cases is a spouses ability in certain circumstances to claim part of their former spouses National Insurance contributions towards their own provision. The sums involved can be significant.

I always advise clients early in the process to obtain expert financial advice in relation to all aspects of pension provision as otherwise benefits and opportunities may be lost. Family lawyers need to be alive to the various opportunities pensions present and ensure they have a close network of allied professional advisers to ensure clients are best served.

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", according to analysis from the financial consultancy LCP. 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, says LCP, that many may not be aware of this or are deterred from doing so.