That many women come out of a divorce worse off financially than they were when married has long been caveat in marriage and family law.
A study by the Phoenix Group reveals that two out of every five women are worse off financially after getting divorced. Half the women made no contributions to a pension plan while they were married, and only one in six had rights to a pension through their former husbands.
Very many people end marriages knowing very little about their own financial affairs. This can be particularly hard on women who during the years of the marriage deferred to their husbands about marital finances.
Assessing this feminization of divorce poverty, Shellie Wells, spokesperson for Phoenix Group, said, “It’s clear that divorced women face an uncertain future in retirement. Not only have many given up rights to their husband’s pension provision, they have often stopped paying into their own pension plan; dipped into savings and at worst, lost contact with any savings they have accrued.”
Many women, Wells said, do not realize that after the marital home, the husband’s pension may be the most valuable asset subject to distribution in a divorce. Surprisingly, the Phoenix research showed that 38 percent of the women who had pension arrangements in their marriage “did not know what happened to [the pension arrangement] when they were divorced.” Moreover, 38 percent also had “no idea” what settlement they had been awarded, and only 6 percent received a pension sharing order or a pension earmarking order.
In all jurisdictions, pensions are marital property and subject to distribution. Pensions are always taken into account if either party has one. Sometimes spouses divide the pensions in two, or they trade off, which means one spouse keeps all or most of their pension but exchanges more of the house or other assets to compensate the other spouse.
Wells said that women must insure their long-term financial security and that those going through “a divorce really understand their family finances and what they are entitled to, preferably seeking expert advice…”
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