Pensions wake up call for divorcees

Following a new report exposing the under-use of pension sharing orders in divorces, one of the country’s top family lawyers has issued a warning that divorcees could be missing out on money they are entitled to from their partner’s pension. The new figures show that in 86 per cent of divorces, no pension sharing takes place. This is set to become even more significant given the wholesale pension reform proposed in the Budget.

Pension sharing orders allow pension arrangements on divorce to be divided completely, creating a clean break between the divorcing couple. The first detailed study into pension sharing orders since their introduction in 2000 found that the orders were made in just 14 per cent of cases.

Liz Allen, head of family law at Stephens Scown LLP in Exeter obtained the first reverse pension sharing order in the country. She said: “Pensions are often the most valuable asset in a marriage. A good occupational pension can be worth millions in capital terms and given the relative ease with which a pension can be shared on divorce it is very disappointing that more people do not take advantage of this option. It means that many divorcees are missing out on significant sums of money.”

The study also found that pension sharing orders were more likely to be made between older parties from longer marriages, with more capital and pension wealth.

Liz added: “It seems that sharing orders are becoming the prerogative of a relatively privileged minority. In my experience, they could be applied in many more cases. Pensions are a highly technical area, often with hidden values and very careful advice must be sought to ensure the full value is known.”

The study was carried out by Hilary Woodward of Cardiff Law School and included a survey of court files, as well as interviews with practitioners and judges.

Liz Allen is one of the top divorce solicitors in the UK. Stephens Scown has been recognised as having the Private Client and Family Law Team of the Year by the British Legal Awards 2013. Liz has also been named on the 2013 Citywealth Leaders List, an international guide to the most highly regarded figures in private wealth management.

Stephens Scown has 44 partners and 250 staff across its offices in Exeter, Truro and St Austell. For more information visit www.stephens-scown.co.uk