SURVIVAL GUIDE TO PENSIONS ON

DIVORCE

LAW FOR LIFE/ADVICE NOW

Class Legal - 2 February 2021Beth Kirkland Law for Life, principal author of Survival Guide

Jo Miles Cambridge University & Pension Advisory Group

Paul Cobley Oak Barn Financial Planning & Pension Advisory Group.

Rhys Taylor The 36 Group & Pension Advisory Group

AGENDA1. Introducing Law for Life

2. The context for pensions on divorce

3. Beth Kirkland and the Survival Guide

4. What use can practitioners make of the Survival Guide

About Law for Life

Law for Life: the Foundation for Public Legal Education is an education and information charity that aims to increase access to justice by providing everyone with an awareness of their legal rights together with the confidence and skills to assert them.

About Law for Life

What we do:

• We run the award winning Advicenow website – our public legal information website

• We deliver interactive community-based training and other education programmes

• Policy, research and consultancy

Advicenow resources

Our resources are, with only a few exceptions, free to the public:

• Family law issues ➢ A survival guide to sorting out your finances when you get divorced ➢ How to apply for an financial order ➢ Affordable Advice Service in collaboration with Resolution

• Going to court

• Welfare benefits

• Housing law

Our reach

• The Advicenow website receives over 1.2 million visits per year generating 2 million page views.

• 450,000 users seek help with family law issues each year.

• 50% of users are disabled and 48% have a household income below £1,100 per month.

• 22% of users are advisers or are helping someone else.

Thank you!

twitter.com/LfL_Advicenow

www.lawforlife.org.uk www.advicenow.org.uk

beth.kirkland@lawforlife.org.uk

Pensions out in the real world

Joanna Miles*, Reader in Family Law & Policy, University of Cambridge

Presenting data from Jennifer Buckley and Debora Price*, University of Manchester, to be published soon: “Pensions on divorce: where now, what next?” (2021) Child & Family Law Quarterly, issue 1

(forthcoming March)

*member of PAG

Spoiler alert: “one central finding dominates the research on this topic [globally]: namely, that in financial terms, women suffer more than men from a break-up”

(Mortelmans, 2013)

But more insights needed into: !Longer-term consequences of divorce !Situation before divorce, in terms of intra-household wealth

holdings

The existing research data

The existing research data

Early findings by Price (late 1990s/early 00s data – pre-pension sharing):

• Poverty rate of +40% amongst divorced women in later life

• Profound within-couple gender disparities in pension accumulation

• For women >65 who had ever been mothers, other things being equal, being divorced before age 45 doubled the odds of being in poverty in later life and being divorced after age 45 tripled those odds

• Based on latest round of data from ONS Wealth & Assets survey • Data from c 18K households, c 35.6K individuals, 2016-18

• Includes private pension wealth (only), as well as net property wealth

• Uses ONS formula to derive a figure for size of pension pot that seeks to deal with difficulties of valuing DB pensions

• Analysis excludes those u30 (tend to be single and to have accrued very little pension wealth) ! data for 20.8K individuals with partners, 10.4K couples

The new analysis by Buckley and Price

Individual private pension wealth £ by sex and marital status (married and divorced only) at the 25th, 50th and 75th percentiles

Median pension share by couples’ combined pension wealth (quintiles) for men and women, adults aged 30+

Median individual's share of the total pension wealth within a couple by marital status and sex, adults aged >30

Median property wealth and median combined pension wealth by household income (equivalised) quintiles, for couples of adults aged 30+

Pension wealth minus property wealth for couples by combined pension wealth quintile and government office region, couples aged 30+

• Pension wealth matters, especially – as a proportion of total wealth – outside London/SE, significantly exceeding property wealth save for the richest households

• Women are well behind men in pension accumulation across all wealth-levels

• Pension sharing on divorce is therefore a vital tool to guard against poverty for women in later life

• Offsetting should only be done where you have a very clear sense of the value of the pension being offset – especially in DB cases

The new Law for Life guide is a valuable tool to help clients – as well as unrepresented parties – understand why this is so important!

Key takeaway points: pension wealth really matters!