Divorce and separation can mark a major turning point in people’s financial lives, disrupting long-term plans and forcing difficult decisions at a time of emotional and practical upheaval. Yet pensions - one of the most valuable assets people hold outside of their home - are frequently overlooked, according to Standard Life, a retirement specialist focused entirely on retirement savings and income.
New research explores how life’s pivotal moments can shape, and sometimes disrupt, people’s long-term financial journeys, highlighting a significant knowledge gap when it comes to pensions and divorce. More than a quarter (27%) of married people or those in civil partnerships who have a private pension say they don’t know what would happen to their pension if they divorced or separated, rising to 30% among women. Despite the potential financial implications, almost three quarters (73%) of couples admit they have never discussed how pensions would be treated if their relationship ended.
A lack of awareness with lasting consequences
The impact of this lack of understanding can be significant. Among those who have already been through a divorce and have a private pension, one in five (19%) say they wish they had handled the pension side differently.
There is also a clear gender divide, with more than a quarter of divorced women (28%) saying they regret how pensions were dealt with during separation, compared to just 9% of men.
This reflects a broader imbalance in retirement savings. Previous research by the Standard Life Centre for the Future of Retirement has shown that life events such as motherhood, childcare, menopause and caring responsibilities can disproportionately affect women’s earnings and pension contributions over time. By middle age, men are contributing significantly more into their pensions each month than women, meaning many women enter divorce with smaller pension pots to begin with.
Pensions still overlooked in divorce conversations
Despite their long-term importance, pensions are still not consistently recognised as a key asset during separation. Just three in ten UK adults (30%) believe pensions should be considered as part of a divorce settlement, while nearly half (47%) do not think they should be taken into account at all. This lack of awareness, combined with limited discussion between partners, may leave many at risk of poorer financial outcomes in later life. Standard Life calculations suggest a single retiree may need around £225,000 more in private pension savings than a couple to achieve a moderate standard of living in retirement, assuming receipt of the full new state pension3.
Mike Ambery, Retirement Savings Director at Standard Life, part of Phoenix Group, commented: “Life rarely follows a straight line. Most people don’t set out expecting their long-term plans to change, but relationships, careers and circumstances can take unexpected turns – and divorce is one of those moments that can reshape financial futures in ways that people may not have planned for.
“When going through separation, it’s completely understandable that pensions aren’t always front of mind, particularly when there are more immediate pressures like housing, childcare or legal arrangements. However, pensions are often one of the most valuable assets built up over a lifetime – and decisions made at this point can quietly shape financial security for decades to come.
“What’s striking is not just the level of uncertainty, but how few couples are having these conversations at all. Taking the time to understand what pensions you have between you, how they’re structured, and how they might be treated in the event of separation can help people make more informed decisions. It can also play an important role in helping ensure both parties are able to build financial security in later life.”
Mike Ambery shares key things to keep in mind when going through a separation:
Make sure pensions are part of the conversation: “Pensions are often one of the largest assets after the family home, but they can be overlooked because they’re less visible. Making sure they’re included alongside other assets can help give a more complete picture of your finances.”
Understand what you have: “Taking time to review your pension savings, including any older pots from previous jobs, can help you understand their value and how they fit into your overall financial position.”
Don’t leave decisions until later: “It‘s natural to focus on more immediate concerns, but delaying decisions about pensions may make things more complicated. Addressing them early can help avoid issues further down the line.”
Be aware of the long-term impact: “Decisions made at the point of separation can have a lasting effect on your income in retirement. Taking a long-term view can help ensure you’re making choices that support your future financial security.”
Be clear on how pensions are valued and divided: “Pensions aren’t automatically split equally on divorce, and different schemes can be treated in different ways. Approaches like ‘pension sharing’ or ‘pension offsetting’ can lead to very different outcomes, so it’s important pensions are properly valued and not traded away without understanding the long-term impact.”
Consider seeking guidance or advice: “Separation can be a complex time, so getting guidance or financial advice can help you understand your options and feel more confident that decisions are right for your individual circumstances.”
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