News story
29th June 2002
Female Divorcees Facing Poverty in Retirement
Steve Webb MP, Liberal Democrat Shadow Work and
Pensions Secretary today released a written parliamentary
answer that revealed many divorced women may be heading
for poverty in retirement.
Since December 2000 new legislation has allowed people to
make an immediate claim on their partners private pension
pot as part of a divorce settlement. However, while there
are 140,000 divorces a year, the Government figures show
that only 367 couples have opted for pension splitting.
The new figures are released ahead of a Solicitors Family
Law Association survey of its members experiences of the
new provisions. The research provides first hand accounts
of the reasons why women are not choosing pension
splitting.
Steve Webb said:
“These new figures are extremely worrying. For
generations married women have been the poor relations
when it comes to pensions. With such high divorce rates,
women look set to be the poorest pensioners of the
future.
“If the Government are serious about preventing
pensioner poverty then they must discover the reasons for
the failure of pension splitting and act to ensure
tomorrow’s pensioners can enjoy a secure
retirement.”
ENDS
Notes to editors:
· The Solicitors Family Law Association (SFLA) has
conducted a survey of its member’s views on the new
provisions.
· The new provisions were introduced under the 1999
Welfare Reform and Pensions Act. Pension sharing became
available in respect of divorce and nullity proceedings
that began on or after 1 December 2000.
· The new provisions mean the pension pot can be
immediately split. The portion of the pot can either be
transferred into a separate pot with the existing
provider or transferred to a new provider. The two
options previously available to divorcing couples still
exist. ‘Offsetting’ values the pension pot and
offsets this against other assets. ‘Earmarking’
allows for a proportion of the pot to be paid to the
partner once the lump sum comes into payment. The main
problem with earmarking is that if the owner of the
pension pot dies before retirement the proportion of the
pot will not be passed on. It also requires the couple to
stay in contact.
· The latest ONS figures show that in England and Wales
there were 141,135 divorces in 2000.
· Written answer to Steve Webb, 15th April 2002:
Pension-sharing
Mr. Webb: To ask the Secretary of State for Work and
Pensions if he will estimate the number of people who
have benefited from his Department's legislation on
pension-sharing after divorce; and what assessment he has
made of the effectiveness of this legislation. [32622]
Ms Rosie Winterton: I have been asked to reply.
My Department has been monitoring pension sharing orders
made by the courts. Our records show that 367 such orders
have been made since December 2000. My Department is
currently evaluating the effectiveness of this
legislation as it applies to divorce proceedings. I hope
to be able to announce the results of this in the autumn.
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