Delay spoils pension law victory for divorcees

Money and separation: change in rules welcomed but will still leave many women penniless
Click to follow
The Independent Online
Thousands of divorced women stand to benefit from government plans yesterday to enable them to claim a share of their husbands' pensions - but thousands more will lose out because of the delay in implementing the proposals.

A White Paper gave the go-ahead for pension rights to be split for the first time, but legislation will only be introduced when "practicable to do so and the future legislative programme allows", which is likely to mean April 2000.

The changes will allow courts - or couples by agreement - to split a person's (usually the husband's) private, occupational or state earnings- related pension at the date of divorce, giving the ex-partner immediate rights to a pension of his or her own. The split would not necessarily be 50-50.

The paper got a broad welcome from women's and legal organisations and the pensions industry. Bill Birmingham, benefits services manager at the National Association of Pension Funds said: "It has long been the policy of the NAPF that pension splitting should be permitted."

At present, the most that a former spouse can achieve is an order earmarking part of the pension at the time of retirement, leaving ex-wives at risk of receiving nothing if their husbands die before retirement or of being forced onto benefit if they die later.

The Government has never been wholeheartedly behind the change, claiming the reform would be too expensive and too complicated to administer. But amendments successfully tabled to last year's Family Law Act by Baroness Hollis, a Labour Social Security spokeswoman, paved the way for yesterday's paper.

John Denham, the shadow Pensions Minister, said women would suffer because of the Government's delay in introducing the changes. "In the coming years women will still retire onto means-tested benefits who could have been enjoying a pension in their own right," he said.

Launching the paper in the House of Lords, Lord MacKay of Ardbrecknish, minister of state for social security, emphasised that both parties to a divorce might have to re-think their expectations. "It is currently often the case that the wife keeps the house and the husband the pension simply because the pension cannot be split. In future this may not be the case," Lord Mackay said.

Family lawyers emphasised, however, that suggestions that couples would not be able to reach "clean break" settlements were misconceived. Richard Sax, a member of the Law Society's family law committee, said: "I can think of cases where the husband wanted a clean break but he couldn't split his pension."

Sally Quinn, of the pressure group Fairshares, highlighted what she said was the "sting in the tale" in the paper, which says private scheme rights will be valued by the scheme using the cash equivalent transfer value method. Women who had perhaps been married for 30 years and whose husbands enjoyed generous pensions based on final salary would lose out, she said.

Caroline Neville, 47,who also works for Fairshares, disputed suggestions yesterday that pension splitting could lead to more divorced wives being forced out of the matrimonial home. Ms Neville is in the process of unpacking in a new house after the family home was sold to provide homes for her and her ex-husband. She has no pension of her own, although her husband had paid in to four schemes. "I am 47 and have no prospect of getting a pension. I would have liked my share. I would have liked to have known I had a pension," she said.