Bridging the Gender Pension Gap: Key Insights from Our Latest Podcast

Why Do Women Retire with Smaller Pensions?

Several factors contribute to the gender pension gap:

• Lower Earnings and Part-Time Work: Women often work part-time or in lower-paid roles, reducing pension contributions.
• Career Breaks: Maternity leave and childcare often lead to reduced pension savings.
• Auto-Enrolment Barriers: The earnings threshold can exclude part-time workers from automatic pension savings.
• Gender Pay Gap: Lower salaries lead to lower pension contributions.
• Women retire with, on average, £69,000 less in their pension pot than men, increasing their financial vulnerability.

The Importance of Pensions in Divorce

Pensions are a significant financial asset, sometimes more valuable than the family home. However, they are often overlooked in divorce settlements, with some women prioritising short-term needs over long-term security.

Key Reasons to Prioritise Pensions in Divorce:

• Long-Term Security: Pensions provide a stable income during retirement.
• Legal Entitlement: Pensions can be shared fairly in divorce proceedings.
• Women’s Longer Life Expectancy: Women statistically live longer, making retirement security vital.

Pension Sharing and Cash Flow Modelling

Sally introduced cash flow modelling, a tool that projects income, expenses, and financial needs post-divorce. It helps clients:

• Visualise long-term financial stability.
• Compare settlement options.
• Make informed decisions about pension sharing.

Steps Women Can Take to Close the Pension Gap

Sally shared practical strategies to help women secure their pension future:

• Join Workplace Pension Schemes: Request enrolment if not automatic.
• Maximise Matched Contributions: Leverage employer contributions.
• Continue Contributions During Career Breaks: Maintain savings momentum.
• Trace Lost Pensions: Use the UK Government's pension tracing service.
• Consider Pension Credits: Check eligibility for pension credits to boost state pension entitlement.

The Value of Financial Planning During Divorce

Seeking financial advice during divorce is crucial, especially regarding pensions. At Myerson Solicitors, we work closely with financial planners like Sally to provide comprehensive support for our clients.