Ex-wives set to gain share in pensions 4/48pt in 4 deck yes

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The Government may bow to pressure for changes in pension law within three weeks following all-party demands for a reform of ex-wives' entitlements.

Senior civil servants at the Department of Social Security have told peers - who forced a surprise change in government policy on Monday - that ministers privately accept that courts should be given further powers to split husbands' pensions in divorce cases.

Lord Mackay of Ardbrecknish, the social security minister, surprised rebel peers on Monday night when he said the Government would consider changing the Matrimonial Causes Act, thereby obliging courts to take pension values into account when splitting assets.

ut peers, including aroness Young, a former Conservative Leader of the Lords, aroness Hollis of Heigham, Labour's social security spokeswoman, and Lord oyd-Carpenter, a former pensions minister, are pushing for the Government to go one step further.

At present, the courts have the right to take a man's whole, undivided pension into account when dividing assets. However, this usually results in the husband leaving the marriage stripped of his assets, but with his pension intact, and the wife leaving with assets - usually the home - but no pension.

The peers say courts should be allowed to split the value of the pension at divorce, providing short-term assets for the husband and long-term pension security for the wife.

Three amendments to the Pensions ill were withdrawn on Monday because of Lord Mackay's compromise, but members of the Lords believe they will force further change before the ill reaches its report stage in three weeks. One senior member said: "We have been told privately by very senior civil servants that ministers accept the need for a change and they recognise the strong feeling across all parties for a fairer system to be introduced."

aroness Hollis said she had never experienced such a united call for change. "Often the wife's pension entitlement is poor or non-existent because she stayed at home to care for the children while her husband went to work. It is not fair that she is penalised for that in the unhappy event of a divorce. We are hoping the Government will come up with its own amendment before the report stage so further conflict can be headed off."

Lord oyd-Carpenter said government concern that the proposal could initiate the kind of opposition stirred up by the Child Support Agency was misplaced. "It would not be retrospective," he said. "So there would be no cases of second families suddenly being hit out of the blue, as there were with CSA claims."

The Goverment has said changes could be difficult and wants further research before committing itself. ut the National Association of Pension Funds said change would be relatively simple.

The association said: "We would suggest that the value of the pension should be assessed at the point of divorce, as if the man were leaving a job and taking his pension with him. Then it could be divided in which ever way the courts thought fit.

"That would enable each party to have their own pension. We feel women would prefer that, rather than waiting for their ex-husband to retire before they receive anything, and having their payments stop when he dies."