What the new divorce bill means for women’s financial futures

Adviser Samantha Kaye discusses the ‘No-fault’ Divorce Bill, and why women should be extra vigilant when dividing up assets.

I have previously talked about the Chartered Insurance Institute’s Insuring Women’s Futures programme, and their ‘6 Moments that Matter’ in a woman’s financial journey, including making and breaking relationships. You may have noticed divorce in recent headlines – no, not because the lockdown has been testing the mettle of couples across the UK, but due to the landmark changes to divorce legislation currently working their way through government.

But with divorced women retiring with savings 75% smaller than male counterparts, what does the new Bill mean for women’s financial futures?

Shaking off the ‘blame game’

The Divorce, Dissolution and Separation Bill (or ‘No-fault Divorce Bill’) has just gained Royal Assent and is set to come into play in Autumn 2021. Proclaimed to be the biggest shakeup in divorce law since the Sixties, the Bill seeks – in short – to reduce family conflict and speed up the divorce process by putting an end to needless “blame games”. Currently, one party has to make accusations about the other’s conduct, such as unreasonable behaviour or adultery, or otherwise face years of separation before a divorce is granted – even if the decision to separate is mutual. Instead, the new laws will allow a spouse or couple to apply for divorce by making a statement of ‘irretrievable breakdown’.

Justice Secretary and Lord Chancellor Rt Hon Robert Buckland QC MP commented on the changes:

“These new laws will stop separating couples having to make needless allegations against one another, and instead help them focus on resolving their issues amicably. By sparing them the need to play the “blame game”, we are removing the antagonism that this creates so families can better move on with their lives.” 1

A bumpy road for divorced women

Divorce is infamously expensive – and with negotiations often focusing on property, bank accounts and immediate assets, pensions are frequently overlooked. Indeed, nearly three quarters of divorcing couples fail to consider their legal right to share pensions.2

With women already facing a gender pay gap and pensions gap, failing to discuss pensions upon divorce can lead to many women losing out on a share of one of the most valuable assets, and therefore risking financial vulnerability in later life.
The numbers speak for themselves:

• Divorced women’s median pension wealth at retirement is just 25% of that of their male counterparts.3
• On average, women currently earn 18% less than men.4
• In 2018, divorced women had a private pension income 42% smaller than the UK average.5

A recent Inspiring Women’s Futures study commented on these stark numbers:

“It demonstrates that older women face a longevity trap, with many dependent on partners and having insufficient pension provision to support themselves comfortably through retirement and to meet their later life care needs.”6

Industry bodies such as The Chartered Insurance Institute (CII) and the Law Society have called for pension-sharing to be the default position in divorce proceedings – however, regardless of whether this suggestion is taken into account, it is clear that women need to take control of the discussions about pensions.

To ensure that all aspects of a settlement are covered, and for guidance and stability, it’s important to take financial advice during divorce proceedings. After the divorce, your financial adviser will work with you to help you plan for a comfortable retirement and later life.

For more information

Wherever you are on your financial journey, it is important that you’re getting the right advice on planning for a secure future.

If you have a question about divorce or pensions planning, or would like more information about my services, please contact me on 01444 849809 or via email at samantha.kaye@sjpp.co.uk.


1 Gov.uk, “Blame game” to end as Divorce Bill receives Royal Assent, 26 June 2020
2,6  Chartered Insurance Institute, Solving Women’s pension deficit to improve retirement outcomes for all, 2019
3,5  NOW: Pensions research, 2020
4 NOW: Pensions, Facing An Unequal Future – Closing The Gender Pensions Gap, July 2019

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Author: Samantha Kaye
Author: Samantha KayeChartered Financial Planner, Adviser