Pension sharing on divorce: why do we do it, and how might we do things differently?

Abstract

There is a significant gender pension gap in England and Wales. While this does not necessarily cause problems in intact relationships – research suggests that couples who share current income assume that they will share future income – on divorce many women are left with limited pension provision. While the courts can make pension sharing orders on divorce, such orders are uncommon in practice. This article considers whether this problem could be addressed by amending the current statutory framework for dealing with the division of assets on divorce to create automatic pension transfers, either during relationships or at their conclusion.

It is ultimately argued that a multifaceted solution is required, which combines opportunities for individuals to maximise their own pension entitlement, with interpersonal claims when relationships break down. The efficacy of interpersonal claims would be improved by a default position of an equal sharing of pension on divorce, which could be departed from by agreement where, for example, it is unaffordable for both parties to rehouse and share pensions equally. There would, however, be significant practical challenges in achieving such reform.