A new report from Norwich Union equity release, compiled by Mintel, has found a worrying new trend. Despite modern day divorces providing women with a share of their husband’s pension, women who divorced or separated before the pension rule change are facing retirement money worries. The report found that just 4 per cent of divorced women over 50 have received a share of their ex-husband’s pension pot on divorce or separation.
The Norwich Union Equity Release ‘Asset Rich, Cash Poor’ report found that more than three quarters of women surveyed realise that it’s extremely difficult to survive on the current state pension, but are not in a position to put away enough money to build up an adequate pension pot before they retire. In comparison, their male counterparts, who have built up a large retirement pot through years of work, will approach retirement with the knowledge that they are likely to have a comfortable life on retirement.
Despite often being ‘cash poor’, women over 50 are actually often ‘asset rich’ with almost half (49 per cent) owning their home outright – a figure that goes up to nearly two thirds (60 per cent) of over 65 year olds. Women are also most likely to be awarded the house in a divorce settlement (more than half of those who received a settlement of any kind).
It’s therefore not surprising that 29per cent of 50-54 year old women said that they were relying on their property as a means of generating income in retirement as this may be their only option. In fact, is it is now estimated that in aggregate, over 65s hold more than £1,100 billion in un-mortgaged housing wealth.
Nigel Spencer, head of marketing for Norwich Union equity release said, “Women are increasingly becoming the poorer sex when it comes to retirement and it’s worrying to see this problem compounded due to rising divorce rates amongst the over 50s. Many women have sacrificed careers, and therefore their own pension, to raise their family and as a result, are being unfairly punished.”
They are facing a ‘double whammy’ in their retirement with lower pension provision, compounded by a greater life expectancy than men. Currently, a 65 year old woman retiring now has an average life expectancy of a further 22 years. Add to the mix the fact that she may well have taken a career break to raise children this could mean a small pension pot not being able to provide an adequate income for a comfortable retirement.
The divorce rate among the over-50s, which has gone up by more than 50 per cent in the last twenty years is causing particular problems for these women. Many of these women’s sole retirement provision (outside of the state pension) would have been a share of their partner’s pension pot, in fact 45per cent of women over 50 say they expect to use their husband’s pension as their main source of income. Despite recent legislation which gives women a better deal on pensions splitting following divorce, for the increasing numbers of divorced and separated women, the reality is that just one in twenty-five actually receive a share of their ex-husbands pension.
- 45% of middle aged women (50 +) expect to rely on their partner’s income in retirement
- Almost one in seven women will reach retirement as a divorcee
- Only half of women over 50 have any pension provision at all
- And more than a third already have money worries about retirement
