Study Into Pension Sharing On Divorce

The first detailed pension sharing on divorce report shows that the number of Pension Orders made by the Court remains low.

The study, entitled ‘Pensions on divorce: an empirical study’, was undertaken by Hilary Woodward (Cardiff Law School) and Mark Sefton (former Research Associate, Cardiff Law School) and provided an insight into when and how pensions are included in divorce financial remedy orders.

Pension sharing on divorce report

The findings in the report suggest that pension sharing is a positive addition to financial remedies. However, the complexities of pensions deter even practitioners and Judges from using such orders to the maximum advantage.

Offsetting pension against non-pension assets remains the most popular way of approaching pensions on divorce. The study has concluded that there are a number of explanations for this, such as:

• In 20% of Court cases, neither party disclosed any pension other than a basic state pension.  In those cases where pensions are disclosed, more often than not, no Pension Orders were made.
• Pension Orders are more likely to be made between older parties from longer marriages with more capital and pension wealth. Pension sharing is a positive addition to financial remedies on divorce, but offsetting pensions against non-pension assets remains the most common approach to pensions.
• The lack of Pension Orders and the fact that husbands on average had higher pensions than wives means that husbands often fair better after divorce on pensions and wives often fair better on capital.
• The time, cost and fees associated with pension disclosure, expert reports and implementation of Pension Orders acted as deterrents to the making of Pension Orders.

It will be interesting to see whether this trend continues in light of the increased number of litigants in person. It remains essential that in cases where there are pensions involved that parties to the proceedings seek matrimonial advice from a solicitor specialising in these matters.