Legal publisher Sweet & Maxwell have reported an 11% rise in the number of couples who are resorting to splitting their pension pot in two because they have very few additional assets.
During 2011 more than one in 10 settlements ordered by judges required couples to divide the nest egg of the main earner in two.
With the housing market still unstable since the recession, experts have said that the increase in the practice could be down to property being replaced by pensions as a household’s biggest asset.
Furthermore, an increasing number of couples are splitting up when they reach their fifties, an age by which they are likely to have built up significant pensions pots.
Sweet & Maxwell author James Stewart believes the financial crisis is to blame for fewer couples being able to achieve a clean break because homes are now difficult to sell and business interests are difficult to realise – resulting in fewer and fewer people having cash available for settlements.
“As a result, lawyers are looking much more closely at pensions, and in my experience, the number of pension sharing-orders has increased markedly over the course of these past two years.”
Whilst pension splitting is a solution to some problems, it does mean that one spouse could end up with considerably less money to live on in retirement than expected.
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