One in six divorced people said they did not realise their pension could be affected by splitting up, a survey has found.
More than a third said they made no claim on their former partner’s pension, according to the survey of more than 1,000 divorced people.
The research, carried out for Aviva, found 8% of divorcees do not have their own pension savings – and had been relying on their partner to finance their retirement.
As a result of divorce, 19% say they will be, or are, significantly worse off in retirement.
“No fault” divorce rule changes came into force in England and Wales in April – meaning married couples can start proceedings without apportioning blame.
Aviva said it was important for couples who are splitting up to understand the impact it will have on finances, including pensions.
It pointed to Office for National Statistics figures showing 103,592 divorces were granted in England and Wales in 2020. Aviva suggested the total may increase in the coming years, following the no-fault divorce rule changes.
The UK currently holds £15.2tn in household wealth and private pensions make up about £6.4tn, or 42% of the total, it added.
Men are aged 47 on average when they divorce and women are typically aged 44 – ages at which the amount of pension wealth built up may be significant.
To supplement their income after a divorce, 32% of divorcees surveyed said they dipped into their savings, 20% used credit cards for everyday living expenses and 18% borrowed from friends or family.
Some also went out to work, having not done so before their divorce, or got a second job and 12% cut back or cancelled their pension contributions.
Alistair McQueen, the head of savings and retirement at Aviva, said: “It’s critical that, as part of the separation process, couples take time to think about and discuss one of their single most valuable assets – their pension.
“It’s common that one party will have significant pension provision, and the other party may have little or none. Clearly, this could be a relevant factor in any divorce.”
He said there are several options when dealing with pensions at divorce and it can often be a very complex issue, adding: “As well as hiring a family lawyer, it would be advisable for couples to contact a financial adviser to walk them through the pension valuation and financial process.”
