Divorce is often seen as a clean slate—a chance to begin anew, away from conflict and dissatisfaction. But when the dust settles, the reality for many, especially women, is far from liberating. One of the most overlooked areas in divorce proceedings is the long-term financial impact, particularly when it comes to retirement planning and pension sharing.
While the emotional aspects of divorce tend to dominate conversations, the financial aftermath deserves equal, if not more, attention. In the UK, family and divorce law provide mechanisms to help divide assets fairly. However, the actual outcomes often reveal a stark divide between men and women—commonly referred to as the “divorce gap.”
Understanding the divorce gap
The divorce gap refers to the discrepancy in financial well-being between men and women following a divorce. While both parties may suffer financially in the short term, studies consistently show that women are disproportionately affected over the long term.
This gap is largely due to structural issues like the gender pay gap, unequal caregiving responsibilities, and a lack of awareness or emphasis on long-term financial assets such as pensions during divorce settlements.
Pension sharing on divorce
What is pension sharing?
Pension sharing is a legal provision that allows a divorcing couple to divide retirement savings fairly. It is part of the financial remedy orders available through the court and aims to ensure that both spouses have some form of retirement income.
However, it is vastly underutilised. According to the Pensions Policy Institute, fewer than 15% of divorce settlements include any formal pension sharing arrangement. This is despite pensions often being one of the largest matrimonial assets, sometimes even exceeding the value of the family home.
Why are pensions overlooked?
There are several reasons pensions don’t receive the attention they deserve in divorce:
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Lack of awareness: Many divorcing parties—especially women—simply don’t know that pensions can and should be shared.
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Short-term focus: The immediate needs (like housing and childcare) often take precedence.
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Complexity: Pension valuations and the legal procedures involved in pension sharing on divorce can be intimidating.
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Legal representation gaps: Not all solicitors specialise in financial remedy law or prioritise pensions when negotiating settlements.
This oversight leaves one party—usually the woman—at a significant disadvantage later in life.
The gender pay gap and its long shadow
Gender pay gap: the root of financial inequality
The gender pay gap refers to the average difference in earnings between men and women. In the UK, as of 2024, the gap stands at approximately 14.3%, with women earning significantly less over their lifetimes because of part-time work, career breaks, and lower-paid industries.
This earnings gap translates directly into a pension gap. Women retire with significantly smaller pension pots than men—roughly 35% less on average. When divorce enters the equation, these figures worsen.
For example, a woman who took several years off work to care for children is likely to have accrued far less in pension contributions than her spouse. If pensions are not shared during divorce, she faces a bleak retirement—potentially reliant on state benefits or working well beyond retirement age.
Why women need pension sharing the most
Given that women live longer on average and retire with less, pension sharing becomes a vital tool in levelling the playing field. Without it, a woman could leave a long marriage with no claim to her spouse’s pension, effectively erasing years of non-financial contributions such as looking after the home or children.
Post-divorce mediation
Divorce need not always end in courtroom battles. Post-divorce mediation offers couples a less adversarial way to resolve financial issues. This method can be particularly effective in revisiting or adjusting agreements that may have overlooked important assets, like pensions.
Mediators can help both parties understand their rights and encourage fair distribution of matrimonial assets. Importantly, post-divorce mediation can be an opportunity to raise the subject of pensions—if it was missed or misjudged during the initial discussions.
Case study: Sarah’s story
Sarah, 52, divorced her husband after 25 years of marriage. During their marriage, she had worked part-time while raising their children, contributing minimally to her workplace pension. Her husband, a high-earning executive, had accumulated a substantial pension pot.
During the divorce, Sarah focused on keeping the family home, believing it would offer stability for her and her children. Her solicitor only mentioned pension sharing briefly, and it wasn’t included in the settlement.
Fast-forward five years, Sarah finds herself struggling financially, unable to contribute to her retirement savings while shouldering household expenses. Meanwhile, her ex-husband looks forward to a comfortable retirement.
Sarah’s case is far from unique, and it underscores the importance of both legal advice and financial awareness during divorce.
Closing the divorce gap – what needs to change?
Legal and policy changes
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Mandatory pension disclosure: One of the biggest issues is that pensions are often not disclosed or undervalued. Making pension valuations a legal requirement could help.
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Training: Ensuring that professionals involved in divorce proceedings are fully aware of the importance of pensions can lead to more equitable outcomes.
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Promotion of pension sharing in family courts: Judges should actively question and include pension sharing on divorce when ruling on financial settlements.
More needs to be done to educate women about their financial rights in marriage and divorce. Financial literacy campaigns and workshops can empower individuals to advocate for themselves during proceedings.
The long-term impact of divorce on retirement
The financial impact of divorce isn’t just short-term. Without fair pension settlements, many women face poverty in retirement. They may be forced to rent, rely on their children, or depend on inadequate state pensions.
This issue becomes even more concerning when we consider that more women are divorcing in their 50s and 60s—the so-called “silver splitters.” At this life stage, there is little time to rebuild a pension pot.
Ensuring pension sharing is part of every divorce involving substantial retirement savings is critical for securing long-term financial independence.
Whether you’re better off after divorce depends on far more than your emotional well-being—it hinges on financial planning, legal knowledge, and equitable asset division. For women, in particular, pension sharing on divorce can be the difference between financial security and economic hardship in later life.
To truly close the divorce gap, we must move beyond just dividing houses and savings. We must look to the future—towards pensions, retirement, and ensuring security in later years.
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