The financial planning industry has aimed to target more female clients over the last few years, but the campaign needs improvement.
Schroders Personal Wealth (SPW) surveyed 946 UK women and found that 52% do not know their rights, or are unsure of them, when it came to divorce and their partners’ pension.
Some 31% said they were slightly knowledgeable about these things and only 16% felt they had a good understanding of the rules and their rights in this area.
Almost half of the women surveyed (46%) either wouldn’t know what to do when it came to splitting pensions, and 29% hadn’t considered that theirs and their partners’ pensions could be included in a divorce settlement.
Also 17% of women wouldn’t even know how to access their finances if anything happened to their partner, with a further 15% unsure about what to do in these circumstances.
Turn to professionals
When it comes to advice on how to split a pension following a breakup, women would prefer to turn to a professional.
The survey found that they would first and foremost contact a solicitor (78%) for advice to help split a pension following the breakdown of their marriage.
This is closely followed by a financial adviser (65%), and their current pension provider (61%).
They were far less likely to seek advice from their employer, friends, or family, such as their parents or children.
Mind the gap
The survey also found women have considerably less money put away for their retirement than men.
While 92% of those surveyed did have their own pension, their pots are worth, on average, only 32% of men’s.
Encouragingly, women are using other ways to save. Schroder’s PW’s research discovered that these include savings accounts (56%), Isas (38%) and Lisas (15%), investing in stocks and shares (28%), and property (29%).
Despite the huge gap in pension savings and lack of knowledge when it comes to their divorce rights, the survey found that women tend to hold the purse strings.
Some 71% of women say that the household finances are managed mostly, or completely, by them.
Women were positive in their own ability to manage the day-to-day finances, with 44% stating that they were very confident and 51% slightly confident.
‘Not surprising’
Katie Nutting, personal wealth adviser at SPW, said: “It is not surprising that over half of the women responding to our survey do not know their rights when it comes to divorce and pensions as this is a complex area.
“It’s the intricate details around pensions, such as how they are valued against other assets like the house and what income the pension produces rather than the total capital value, which can easily be missed.
“It’s also concerning that our research shows that a lot of our respondent’s savings are in cash. Women need to be more confident when it comes to their savings and look at other opportunities for the long term, which could make their money go further.
“We believe society has a huge role to play in improving women’s confidence when it comes to their finances. A lot of women feel unqualified to deal with financial issues due to outside influences. Building up confidence overtime by working with a professional could change your outlook and help to change your life.”
