Last month, Laura Clay-Harris of our Family department reported on the importance of considering pension assets on divorce (read here). More recently, the Financial Times has reported on research showing that private pensions are the largest asset in divorces where the parties have a net worth of one million or more.
Research from Succession Wealth estimates 43% of the net assets of divorces concluding this year (involving couples with assets worth £1m or more) is held in private pensions. Although this research only refers to a percentage of divorces, the fact that such a high proportion of the wealth is held in pensions is significant. People may perceive wealth to be held in property, or investments but it is important to ensure other assets, such as pensions, do not get left by the wayside.
For the last three months of 2018, out of all of the financial orders that concluded in the courts of England and Wales, only 17.7% included orders regarding pensions. We cannot tell the individual circumstances of these cases and it is likely that in many, pensions were considered and there may have been provision for pension assets to be offset by a larger share of other assets. However, it is a notably low percentage given the importance of pensions as an asset.
Although this specific research will not directly be applicable to everyone, it highlights the need to ensure pensions are properly considered when dividing assets on divorce. For further information regarding underestimating the importance of pensions on divorce, click here.
If you are in the process of or considering divorce proceedings and would like further advice regarding pensions or any aspect of financial issues on divorce, we would be happy to help you. Please contact a member of our family team who can advise you further or call 01603 580018 to arrange an appointment.
Financial Times article: www.ftadviser.com/pensions/2019/04/23/pension-biggest-asset-in-millionaires-divorces.