Interactive Investor

Divorce Day 2022: don’t leave pensions out of the conversation

17th December 2021 11:49

Jemma Jackson from interactive investor

Plus lawyer tips to keep the cost of separation low.

The first full working Monday in January after the festive break is sardonically dubbed ‘Divorce Day’. This is because there are reports that couples seek advice about ending their marriage at the start of January, after the stresses and strains over the Christmas and new year period, which can take their toll on relationships.

These stresses are compounded by the working from home guidance and other social restrictions to combat the coronavirus crisis.

Property is often the first financial asset that comes to mind in divorce or dissolution of civil partnerships, but pensions should not be left out of the conversation as they can be the biggest asset, says interactive investor, the UK’s second-largest DIY investment platform. They are considered a joint marital asset, even if a pension is built up in the name of one partner.

interactive investor’s Great British Retirement Survey 2021* of 10,000 consumers found that 49% of divorced respondents admitted to not discussing pensions during their divorce proceedings.

We came across numerous cases where divorce resulted in adverse financial consequences for individuals in or approaching retirement. Many commented on the adverse financial consequences of divorce generally, and there were others who regretted not getting any of their ex’s pension.

One survey participant eloquently writes: “My ex is a retired policeman and it would be nice to have had the security of a slice of his pension. He has…been generous with the grandchildren in a way I am unable [to be], though the kids love me, which is priceless!”

Rebecca O’Connor, Head of Pensions & Savings, interactive investor, says: “Many people don’t know that a pension is considered a joint asset, even if only one spouse has built it up. Often, women will choose to take the home and will let their ex-husband keep the pension. At the time, this might seem like an advantageous split, but when it comes to retirement income, the partner who took the property rather than the pension has no income to live on, even though they have a house to live in. They might end up having to sell the house to generate the income they need. It’s really important that both partners understand the long-term implications of how they split the pension assets as well as property and do not overlook the value a pension has later on in life.”

Myron Jobson, Personal Finance Campaigner, interactive investor, says: “The pandemic may have exacerbated tensions among some couples, with some believing that they will not attain their ‘happy ever after’ with their current partner having spent extended period of time under one roof. During normal times people were spending less time at home.

“Many divorce proceedings start with a debate over who gets the house, but pensions can be an extremely valuable asset that should not be overlooked. Given a pension is often the largest asset people have – often even more than their home, it is well worth making sure that is part of the conversation.

“The pension freedoms of 2015 provide people with greater flexibility in terms of their finances which has in turn has made pension considerations in divorce more complex, so it is important to seek professional advice for a clearer understanding.

“Pension providers are required to send an initial ‘wake-up’ pack to members when they reach age 50, and then one every five years until the client’s pension pot is fully crystallised. It would be useful if a similar approach was adopted more broadly to coincide with major life events such as divorce, to help ensure both parties do not find themselves short-changed at retirement.”

Gemma Hope, Director, Solicitor, Mediator & Collaborative Lawyer at Family Law Partners offers some tips on how to keep the costs down during a divorce

Try to keep it out of court

Due to the amount of work involved, legal representation within court proceedings can be very expensive. Alternatives to court such as mediation, the collaborative process or arbitration can be much more cost-effective and save you a lot of money.

Look out for firms that offer cost-saving initiatives, such as onboarding tools like Engage

There can be a lot to cover in an initial consultation with a lawyer. It’s important that the first meeting is as productive as possible. In order to advise from the start, there is a lot of information your lawyer will need to know. Some firms now use online tools, such as Engage, to help both the client and the lawyer prepare for the first meeting. These online tools assist by capturing all the information from you that a lawyer will need in order to be able to advise. The information can be gathered at a time that’s convenient to you and at a pace that best suits you. As the information is captured prior to the meeting it also means that any time you’re charged for is time that pertains to advice, guidance and possible solutions from your lawyer rather than time spent just gathering information from you. 

Instruct a specialist family law lawyer for advice

Your case will be more efficiently handled by a specialist in family law. Instructing a family law specialist lawyer who is also a member of Resolution will help make sure that you are working with a lawyer who works within a code of practice that includes dealing with matters in a cost-effective way.

Be mindful as to how you use your solicitors time

Be aware of how you use your lawyer’s time. Instead of sending them lots of short emails with small queries send one longer email setting out all the questions for your lawyer to answer in one go. Also, always think about whether your lawyer is the best person to be contacted to deal with your queries. For non-legal issues, a counsellor, divorce coach or financial adviser might be better placed to help.


A sure-fire way to save costs during a divorce is to make sure that you have the right person for the job. It may initially seem as though instructing a team of professionals to assist you would work out more expensive, however, experience shows that having a good support team around you to help you navigate the emotional, practical, financial and legal aspects of the divorce journey is more efficient and cost-effective overall.

Be clear, open and transparent

There needs to be a clear picture of the financial position in order to work out an appropriate and fair divorce financial settlement. Both spouses have an absolute duty to disclose fully their respective financial positions so that proper financial arrangements can be made. Costs can be saved by being clear, open and transparent about the financial position from the outset.

Be organised

There can be a lot of information and documentation to gather together. If you can be as organised as possible in getting the information and presenting it in a way which is clear to understand this will help save costs.

Think bigger picture

It can be easy to get distracted by the immediate issues that crop up but try and stay focussed on the bigger picture and what you are ultimately looking to achieve. Principles can be costly. As much as something seems unfair if on balance it is going to end up costing you more on legal fees to sort out than the actual issue in dispute, consider whether it makes commercial sense to compromise so you can move on and save money. 

Work together

Even though the marriage has broken down try and still work together in a constructive way to deal with the issues that need to be resolved within the divorce, if you can do that it can save you a significant amount in costs.

Try not to use your lawyer as a go-between, between you and your spouse for non-legal issues. This is not a cost-effective use of your lawyer’s time. If you can put aside your personal feelings towards your spouse and communicate with them directly about matters for which you don’t really need to use lawyers, it will save you a lot of money. If communications are difficult consider instructing a family consultant or divorce coach to help with this.

Get emotional support

A divorce can be highly stressful and emotional, and this can make thinking rationally difficult. Feelings of anger, resentment and sadness can affect your judgement and decision making. So often it is an emotional blocker, rather than a legal issue, preventing a resolution that increases costs. It is imperative you have support around you to deal with the emotional as well as the legal implications of a divorce.

Using the legal process to get at your spouse rather than to get on with your life is going to rack up costs, so it is essential to find ways to manage your emotions to prevent the divorce from being unnecessarily drawn out. A family consultant, counsellor, therapist or divorce coach may be able to help.

Think of the children and know when enough is enough

The welfare of any children needs to be paramount. Knowing when your children are affected by the process and when you should make compromises is important to save your children’s relationships with both parents, and most importantly, to maintain their mental and physical health.

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