In most cases, where there are DB and DC schemes of the same value, the DB scheme will pay far more income in retirement than the DC scheme.
By treating pensions on the value of their CE, as many DIY divorcees may do, rather than considering their underlying value in light of the income they will produce, a non-pension holder may be foregoing a significant claim. The losing party will commonly be the woman who focuses on an immediate need to rehouse.
There already exists a significant pension gap – calculated at around 37.9 per cent by trade union Prospect – and divorce tends to exacerbate this.
A 2021 study by the University of Manchester looking at pension provision for divorcees aged 55-64 found that men had an average total private pension fund value of £100,000, while women had accrued just £19,000.
There is therefore a huge worry that many women are leaving themselves short in retirement as a result of decisions taken in their divorce.
Opting for a DIY divorce may save money on lawyers’ fees, but it may be extremely expensive in the long run.
Matthew Taylor is a partner at Stowe Family Law
