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Pension saving is often embarked upon decades before a person chooses to depart the workforce for their retirement. Thankfully, auto-enrolment means those who are eligible are automatically placed onto a workplace pension scheme, allowing them to build up savings over their working life. A person may also choose to start their own private savings to allow them to make the most of their retirement.
Finally, the State Pension is offered to Britons of an eligible age by the government, but many have come to view this as a safety net to other funds.
However, there is a widening chasm in terms of savings between men and women which may be concerning.
Research has shown that on average, men have substantially more sizeable pension savings than their female counterparts.
But one group of women is lagging even further behind the female average.
It is divorced women who seem to fare worst in terms of pension saving, often left with a dwindling and small pot unlikely to help them sufficiently enough in retirement.
Express.co.uk spoke to Jackie Leiper, Managing Director of Workplace Savings and Contributions at Lloyds Banking Group who explained the issue further.
She said: “An important life moment for many women comes if their relationship breaks down. Just under half of marriage in the UK do end in divorce, but splitting up is also higher for cohabiting couples too.
“When you get into that territory, and you are dividing assets, many people are good at thinking of how to divide a house – as it is the biggest asset in a marriage.
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“But what many fail to realise is that the pension is by far the next biggest asset. In some cases, if there are final salary pensions, it can even be the biggest.”
However, Ms Leiper explained many people who are getting divorced or separating, as well as legal professionals, fail to understand the complexity of splitting a pension.
In many cases, it is not understood how to put a value on pension assets, or the legislation in terms of what is possible.
There are, however, laws which take into consideration this eventuality, but, as Ms Leiper added, there is less than a 10 percent take up of this.
She continued: “71 percent of divorced women have told us they could not remember their pension being mentioned when it came to dividing the assets between themselves and their partners.
“That is not to say it was not included, they just did not have an active conversation in terms of what was done – and this is concerning given the importance of pension saving.
“People often need advice for more complex pension arrangements. But it could and should be the case that the default position is that the pension is shared, whereas at the moment it is that it does not actually have to be considered.”
The pension pot gap between men and women is often stark, and demonstrates the vast differences when it comes to retirement.
Women are often left worse off, and therefore may be forced to compromise on the retirement of their dreams.
However, for divorced women, on average, the situation appears much more dire.
Ms Leiper concluded: “Divorced women, particularly those who are still caring for children, often end up in the worst financial position of all.
“If you look at divorced women reaching retirement, their pension pot size is even lower than the average woman’s – very, very poor.”
Women who have split from their partners are therefore urged to look at their pension arrangements very carefully.
They are encouraged to take an active role in seeing how pensions will be split upon a relationship coming to an end, and making sure they evaluate their own saving habits for their pot.
Finally, women can speak to a pension adviser who may be able to provide help for a person’s individual circumstances.
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