Older female divorcees could be missing out on £50,000 in state pension

by Laura Miller from interactive investor |

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‘Silver splitters’ must tell DWP of their divorce to qualify for boosted payments in retirement, experts say.

Tens of thousands of women who divorce later in life – silver splitters – may be missing out on huge sums in state pension payments.

A complex and little-known system means female divorcees are often unaware they are due extra income, according to analysis by pension consultancy LCP, which could cost them as much as £50,000 over the course of their retirement.

The issue is whether they passed the state pension age when they split from their former husband.

Women who reached state pension age before 6 April 2016 – the majority – come under the old system, which pays extra to divorced women who would otherwise not get the full state pension. 

But if these women get divorced after reaching state pension age, they will only receive the extra benefit they are owed if they tell the Department of Work and Pensions (DWP) of their split.  

According to LCP, there is worrying evidence many women may not be aware of the need to contact the DWP about their divorce, or may be put off when they try.

Steve Webb, partner at LCP and former pensions minister, said: “Every year, thousands of women over state pension age get divorced, but many may not be aware that they can qualify for a state pension boost as a result.  

“Any woman who reached pension age before 6 April 2016 and has since got divorced should contact the DWP if she is not on a full basic state pension, to see if she is entitled to an increase based on her ex-husband’s contributions”.

Divorce among older couples is on the rise. In the late 1990s and early 2000s, there were roughly 4,000 divorces involving women over 60 each year, according to the Office for National Statistics (ONS). That has now risen to around 6,000 per year.  

From 1998-2018, more than 100,000 women aged 60 or over divorced, according to the ONS.

Under the old state pension system, in place for those who retired pre-6 April 2016, a married woman who has divorced can substitute her ex-husband’s National Insurance record for her own, up to the date of their divorce, for the purposes of working out her basic state pension.  

This very often results in a significant uplift for the divorced woman, according to calculations by LCP.

For example, a married woman previously on the standard “married woman’s rate of £80.45 a week, can instead get a basic state pension of £134.25 if her husband has a full contribution record.  

Over the course of a 20-year retirement, this can increase her state pension income by more than £50,000.

For women who divorced, and did not remarry, before state pension age, any “substitution based on her ex-husband’s National Insurance record should have taken place when she claimed her state pension. 

But where women divorce after retirement there is no automatic process for an uplift to take place.  Women, and their financial advisers, need to be aware of these rules and make a claim.

Separate research by LCP found tens of thousands of divorced women in retirement on very low state pensions, but that these are rarely given attention in later life divorce cases.

Karin Walker, founder of KGW Family Law, said: “State pensions are all too often disregarded during divorce when they should be one of the first things looked at.”

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