Pension entitlement in divorce? why

[keyser]

Please someone make me understand why this makes sense or why it is a thing, what am I missing?

Why are pensions considered a joint asset in divorce? let's say I am in a marriage, I work , contribute my equal financial share to the home with a salary that has gone through deductions already(to my pension etc). I am all for equal contribution (chores/finances/child care and I have done it with my ex and it worked just fine and we both worked and paid equally except during maternity).

I am not for marriage on paper since I was a 13years old and saw my dad divorce his ex-wife and lost 1.5 million worth of assets in divorce after just 6 years of marriage.

Can’t get past the ‘settled’ reference. If that’s how you feel and are looking at divorce terms before you start, there’s your answer.

I’d always advocate to my children to not get married for this reason. Higher earners snd those who have good fiscal discipline ( ie frugal and save ) get clobbered in favour of lower earners and frivolous spenders.

yea there are some cases where a sahp is impacted and needs adjusting. But all this I’ve sacrificed myself for my husband and he couldn’t earn without me is often nonsense

in cases I see sahm generally tend ti not have a career or earnings to start with and end up with assets they could never have accrued on their own wages so actually they benefit massively in divorce.

my advice to anyone with different earnings, assets and views on money to not marry. And if you go, at the very least seek legal advice and get a pre nup which while not necessarily will be applied, are likely to hold weight as long as it covers scenarios ( eg if you later have children etc)

OP: you protect what you have by never getting married. Don’t create a financial and legal partnership in which assets are joint.

But if you want children don’t ever expect a mother to compromise her career or earning capacity by one penny more than you do.

Do not expect her to fund her own maternity, go part time, turn down a residential work trip. Be prepared to do 50% of nursery and school runs and take 50% of the sick days when you child gets a bug.

Do a full 50% of household and domestic work including your share of attending toddler parties (no matter what the sporting schedule)

Etc.

If you should happen to have a child whose SEN mean it is not possible for both parents to work f/t be prepared to go p/t while the mother does the same.

I mean you get married because you want to spend the rest of your life with someone and share everything. You don't sound like you want to get married, so don't.

@keyser marriage is supposed to be a partnership where all assets are pooled for the benefit of the family unit, not one individual. That's the principle..you join together so no his/hers.

Everyone should marry someone who they believe is an equal contributor, which for most people doesn't mean only financial contribution. Sometimes one person has the higher income but the other person contributes more domestically or for caring for family. Perhaps one doesn't contribute more financially due to health or the chosen career path. A teacher Vs an investment banker.

If your key metric for a relationship is that your partner has to always be financially equal to you then that's ok but be upfront with your partner.

However I would advise you don't ask a partner to have children because planning pregnancy, getting pregnant, giving birth and maternity leave impacts earning potential and careers.

A 6 year marriage, later in life, with no children is unlikely to see assets distributed 50/50 so not sure what happened with your father. It seems to have shaped your views on marriage which is understandable however I think if your biggest concern is the risk of losing money then don't get married or have children. It's the only way to safeguard yourself.

Btw, women who have had children are statically always much poorer after a divorce. Men invariable go on to rebuild wealth as the ongoing contribution to children is actually very low.

Because equality in a marriage is a rare thing, even if you are “all for it”. Once children come into the equation equality often goes out the window, even if you intend to retain it.
Women are significantly less likely to have adequate pension savings than men. This is for a variety of reasons- they may go part time for a bit when children are small, they may have less opportunity to progress in their careers because they are seen as a risk (even if they don’t have children), they may end up footing more of the costs of maternity leave and child-raising, leaving them with a lower pension contribution. Women who contribute equally to the home are often left with less of a margin for saving and investing, because they earn less or because in fact they pick up more of child-related costs. Plus, not everyone’s pension scheme provides the same benefit or even the same level of contribution, so it is really easy for one partner to end up with much better provision than the other.

Have a look here for some stats: https://commonslibrary.parliament.uk/research-briefings/cbp-9517/

As both parties are supposed to be partners on a divorce everything they have earned goes into the mix for sharing.

@keyser you don't seem to value your partner because of their earnings. In your head there is already a balance sheet that puts you ahead. From what you have written I think she/he isn't the right person for you as financial security is a strong motivator for you and doesn't seem to be the same for her.

I know many relationships, within my family, where the man is an extremely high earner and married to a woman earning very little. It works however because he values HER for who she is not the ££. If they split he would have to provide substantially however they have children and he has always said he would want the children to have a lovely life so wouldn't begrudge money.

Interestingly these men tend to stay married because they are respectful to their wives and don't treat marriage as a financial scorecard.

You miss the whole point of being married!!

Don't get married and then take advice on how to keep things as separate as possible while.co habiting.

You don't need to get married nowadays so,if you don't want to be equals, then just don't!

Drives me nuts when one party earns a lot and so thinks they are entitled to more when the other probably picks up a much larger share of the unpaid housework or children care. That's working hard too!! Believe me.

Just don’t get married. Getting married is a financial contract above all else about two people joining their assets and lives legally. That contract has benefits and downsides.

If you don’t like the terms of that contract, don’t enter into it.

You can still have a happy long meaningful relationship without marriage, if you don’t want the consequences of a divorce. But it does mean that you would need to put other legal structures in place such as wills, owning joint assets such as a house in joint names etc so that you can benefit on death.

The financial contract is just one of those things many do not want to admit.

I decided to never get married, I just wanted to know why this is a thing.

Which is why I said “chooses” not to save

as you say, if they chose to spend on the pub or gambling, or clothes, shoes, anything really.

it’s not fair when the spender spends, and the saver saves, for the savings to then be split.

Well I think you’ve received some really helpful answers. Good on you for deciding that marriage isn’t for you. Doing it because it’s ’what people do’ often ends in both parties being hurt. It’s an option, not an obligation.

It depends on the length of the marriage too. I did quite well as exOH had a decent pension and I had a vulture for a solicitor. At the end of the day, it’s an asset and also the lifestyle that the “poorer” one has enjoyed for the duration of the marriage is taken into account.

But did he spend that money within the marriage instead? On bills, the home, holidays?

A pension is effectively deferred income. I don't see any practical difference between the practical status of the asset of a pension pot of £500,000 which produces an income of £800 per month vs the asset of a mortgage-free house which saves the owner from paying £800 per month rent (numbers simplified for ease of comparison but in the case of a divorcing couple the actual value of each may be different and other assets split unevenly to give 2 equal pots)

The state of marriage is to tie together the financial futures of two people. Sharing everything. Either both rich or both poor. That's what the marriage vows mean. This creates a stability which is beneficial to both. If the marriage doesn't work out then unless it was very short-lived (ie less than 18 months) the promise must be honoured so each divorced person goes their way with a roughly equal split of assets unless there is good reason for it t9 be unequal. The identity of which person did the work to earn the assets is not a good reason because that work was facilitated and enabled by the other person in the partnership. Of course if you don't want a life partner, don't want to commit to share for better or for worse and would rather fly solo, reliant on noone and noone reliant on you, then you are entirely at liberty to stay solo. But I've lost count of the mumsnet threads from women who have become reliant on a man, bearing his children and giving up her own career and now unable to make much of a living (or kept her career by spending most of her earnings on childcare while her man puts all his money in his pension instead) but who never bothered with marriage because it's just a bit of paper/just a big expensive party, who find themselves destitute while their ex retains all the assets because of the lack of that promise of partnership.

Oh, this is a very important caveat. OP is well within their rights not to marry. (It’s likely to be the best decision given their reticence about finances.) But they need to know that only a crushingly naive partner would agree to raise children with them without the security afforded by marriage. To refuse to marry but still expect children from a partner would be utterly unreasonable. As I said upthread, marriage comes with benefits and risks. It’s about weighing those and arriving at a conclusion that works for the individual. We can’t always have everything we want.

So you're not married?
I'm an old fashioned and probably a romantic but marriage is a serious long term commitment, you become a team, traditional vow includes "all my worldly good I share with you"
All assets upon marriage are shared and that includes a pension.
There isn't a mine and yours but an ours and us.
It doesn't sound like you should be getting married.
If you aren't ready to commit or willing to get married but girlfriend is and wants marriage don't string her along.
I think the real question is can you support and encourage her to better paid employment or to retrain?
Do your aspirations align?
If she works for an employer minimum wage or not she should be enrolled in a pension scheme.

Because when I married my H it was under the agreement to share everything (actually continue to share everything, as we already practically were), to build and have a life together, and to always be there for each other.

With regard specifically to pensions - we both earn similar amounts, however his employer will match up to 10% whether mine only up to 4%. Therefore we have decided that it’s best to both out in up to the maximum our employers will match. This means he has less take him and I guess day to day ‘I’ pay for more/contribute more to shorter term/other savings. However because we both view all money as ours I have no issue with his. Both pensions are ‘ours’ and are part of planning the rest of our lives. We have no plans to but if we were to divorce of course I should be entitled to half of his (and him half of mine) as putting into them were joint savings decisions we made together. It doesn’t matter that we don’t have DC and I was never a sahp, where all our money went was all a joint decisions so of course I should get half the proceeds from the saving/spending.

and it’s not just pensions, everything is ours. The slightly more money I was able to save to our deposit because my parents were kind enough to not charge board, the slightly (a lot) more he saved from being able to walk to work vs an eye watering London commute. The more I now get paid on a particularly busy month (paid hourly), vs the more he brings home once a year (salaries but with a bonus). The fact that now I generally get home from work first so always get dinner going vs I need to go to bed earlier so he does finally cleaning and locks the house up. The extra snacks I bring home free from work, his toolbox always in his car we can just grab for a DIY job. Everything, money, time, perks, material things, they’re all ours because we chose to have a life together and cemented that choice with the commitment of marriage.

I can not fathom people who marry those with vastly different goals, ambitions and attitudes to life and money from themselves. And I don’t mean ‘I want to be ceo vs I’m happy in middle management’ I mean more general ambitions for what you want from life and how to make that happen. Of course we married for love, part of why we love each other so much is our shared attitude to life, but we were also very aware of the legal contract we were signing (we actually wanted it as it made things much easier in term of wills, next of kin etc). Do people really go into marriage just thinking it as a deceleration of love and with no though to what ‘for the rest of your life’ actually means?

I think that’s fair enough and for some scenarios I think it’s very sensible to not get married. It’s always going to come down to personal choice and circumstance.

i just think of a pension as a big savings pot so its an asset someone has accrued just like any other savings pot so has to go into the mix with everything else when considering the split of assets.

Exactly, but if the wife's (or husband's if he did the child care) career was curtailed by having children (missing promotions etc) so their pension is much less the they gets a portion of the partner's pension, seems only fair.

I suppose you could do a pre-nup although they may not be fully legally binding in the UK, (take advice). If you are already thinking about divorce and you are not yet married it doesn't seem like a great relationship, of course you don't need to marry at all.

Is it her fault she earns minimum wage or could she earn as much as you do? Would she be as available to look after you if she was a high flyer saving madly for her pension? Does she contribute hugely to your happiness that makes her 'worthy' of a share in your wealth? Think about what she does contribute not just financially. If you can't find much then you might as well break up now.

Agree with this

Don't know if it's different in Scotland but my solicitor advised me against claiming half of each other's pension and this was written into the divorce.
Turns out mine was worth £80K and his £400K so that was shit advice.

That doesn't make sense at all 🤷‍♀️ Shocking ! It's the norm in England to literally fill in the form - one column is his and the other is yours. It's very easy to see and then the starting point is 50/50. There's a well established book where they talk about NOT taking equity over a pension share. I had a very small pension due to various circumstances and am now very well off with my pension share.

My solicitor said that as mine was a Local Authority pension and his was a private one, I'd be better off just keeping my own

It wasn't the only bad piece of advice I got.