Divorce changes will benefit women




The House of Lords is not always been associated with progressive legislation. But this week, its members were given advance notice of a change that, assuming it is adopted by the Government, is likely to benefit up to 200,000 women a year.

The Government announced that legislation will be enacted to allow the formal inclusion of a partner's pension in future divorce settlements in England and Wales. Similar provisions already apply in Scotland.

Changes will be brought both to the Matrimonial Causes Act and to the Pensions Bill now working its way through Parliament. It is also proposed that ways of calculating the amounts to be apportioned will be published by the Government at a later stage. But details of what the Government intends remain unknown at this stage.

Women hoping for immediate relief from the problem of what to do about their pensions in the event of divorce should not hold their breath. In Scotland, where the courts are entitled to consider both partners' pensions as part of a divorcing couple's total assets, it has not always proved easy to resolve matters.

Pensions are broadly calculated by reference to their capital value between the date of marriage to the date of divorce. Actuaries are used to working out solutions to issues such as retirement age options, which affect the pension paid or the lump sum element payable to the person who retires.

Until now, the only way division of the pension spoils could be considered was if the remainder of the couple's assets was equal to or greater than the pension, usually a man's, that should be divided.

Clean-break settlements can be arrived at whereby the woman receives cash, or the house, in return for the pension staying with the man. However, problems start if other assets are worth less.

Duncan Howorth, managing director of Abbey National Benefit Consultants, said: "It has been known for a man to go into debt in order to pay the divorced wife a greater lump sum cash settlement and keep the pension.

"In England and Wales even now, it is possible to arrive at a similar settlement, usually when lawyers for both sides agree to include a pension in the divorce settlement. But a husband cannot be legally compelled to do so."

Exactly how the changes will be made is vital to Caroline Fletcher. She was married for 20 years until her divorce and now lives on £42 per week income support. During the marriage, Mrs Fletcher worked as a nurse to supplement the family income and support their son Sean, now a student. When she thought about joining the nurses pension scheme, it was agreed her husband's pension would be more than enough for the two of them in retirement.

"I bought furniture and other things for the house. Now I don't have anything and I have to sell the house. I think the law has let me down," she said.

The Pensions Management Institute, which represents experts in the profession, has proposed that both divorcees are given an equal share of the total funds to keep until pensionable age, or to transfer into a separate fund.

The issue still to be resolved by the Government is how to deal with the fact that trustees may not always be willing to go to the extra trouble and expense of creating two pensions out of an original one.

The problem becomes worse in the case of many unfunded pensions, such as teachers', nurses' or civil servants' schemes.

Roddy Kohn, an adviser at Bristol-based Kohn Cougar, warned against complacency: "No matter what happens, the sensible thing for women to do is to make provision for themselves."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Trainee Consultant - Surrey/ South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    Ashdown Group: Trainee Consultant - Surrey / South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    Recruitment Genius: Claims Administrator

    £16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

    Recruitment Genius: Senior SEO Executive

    £24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

    Day In a Page

    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'
    Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

    Iwan Rheon is returning to his Welsh roots

    Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
    Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

    It's time for my close-up

    Meet the man who films great whites for a living
    Increasing numbers of homeless people in America keep their mobile phones on the streets

    Homeless people keep mobile phones

    A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before