Natasha Grande, partner and co-founder of G&G Law, spoke to the Daily Express’ personal finance section about one of the most commonly overlooked assets during the divorce process.
For many couples, pensions are far from front of mind. Though the higher earner in a relationship will typically cover more of the expenses, it might take until retirement for they and their partner to think about the inevitable gap in their pension values. Women are often the disadvantaged party in these scenarios.
While the Express’ article acknowledges some progress in this regard – for example, the national government has announced upcoming reforms to make gender pension-gap reporting mandatory at local government level in an attempt to reduce the gap, and enshrine pensionable status for unpaid parental and adoption leave. It remains the case that there will be a pension gap in the majority of relationships. When that relationship breaks down, it is imperative that the financially weaker spouse consider the pension issue.
What do separating couples need to keep in mind?
Natasha explains that while strategizing for their divorce, “clients can focus on other assets, wanting cash now rather than planning for the future. Pensions can be seen wrongly as the personal property of the person who generated the pension fund, which is not what the law says.”
In many cases, women are the hardest done by when pensions go unaccounted for, as a result of “the trend of the old-fashioned working pattern, where men were able to have uninterrupted careers building up their pension pot, whilst either women took time off to look after the children or did not work at all.” This becomes especially acute for high earners later in their careers, at which point both pension pots within the relationship might have become considerable assets, but one of the couple might have been affected by a career break.
Expert advice is a must-have for divorcees
“Lawyers who ignore pension assets when advising clients do so at their peril,” Natasha explains. Adequate legal advice should always address the issue of a marital pension pot, including a consideration of effective tax planning and how pensions can play a role in that.
High net worth individuals can maximise their chances of the optimum financial outcome from a divorce by building a strong team of advisers as well as a lawyer, including a pension actuary and a financial adviser. “Pensions are a complex area to value and treat properly in a divorce and you need to have the right expert on speed dial,” Natasha summarises.
Natasha, Neil and the G&G Law team have many years’ experience advising married and unmarried high net worth clients on resolving the financial aspects of separation proceedings, and how to get the best result from what can be an emotionally turbulent experience.
