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Retirement Does Not Look Bright for 
Women Divorcees

Fool.co.uk

United Kingdom

September 5, 2005

One in seven women is facing retirement as a divorcee. However, although the pension rules changed in 2000, entitling women to a share of their husband's pension upon divorce, most women who divorced before this change have missed out on this. As a result, a large number of divorced women are still facing severe money worries in retirement.

There can't be many people unaware of the current pension crisis. Britain's top-heavy population means that there will not be enough working people in the UK to be able to fund future state pensions. Therefore, those without sufficient savings or private pension provision will struggle.

And as women tend to take career breaks to care for children and elderly relatives, their pension provision suffers the most. Hence many women will expect to rely on their husband's income in retirement.

However, a worrying new report from Norwich Union has highlighted a further issue facing women, namely the effects of divorce.

Divorce rates for the over-50s have gone up by 50% in the last twenty years, leaving one in seven women facing retirement as a divorcee.

However, although the pension rules changed in 2000, entitling women to a share of their husband's pension upon divorce, most women who divorced before this change have missed out on this. As a result, a large number of divorced women are still facing severe money worries in retirement.

In fact, the report found that only 4% of divorced women over 50 had received a share of their ex-husband's pension pot upon divorce or separation.
And as women have greater life expectancies than men, their retirement income has to stretch for a longer period of time.

The Motley Fool (How Divorce Ruins Women's Pensions ; 25/08/2005) writes that unfortunately, more than three-quarters of the women surveyed believe they are not in the position to put away enough money to build up an adequate pension pot before retiring.

Although these women do not have a lot of cash stashed away for retirement, they do tend to have assets, 49% of women over 50 own their home outright and that figure rises to 60% for the over 65s. As a result, almost a third of 50-54 year old women intend to rely on their property as a means of generating retirement income.

It certainly does not seem fair that women who take time out of their careers, or even sacrifice their work in order to bring up children or care for others, should suffer in retirement.

According to Age Concern and the Fawcett Society, low-paid workers should be entitled to the State Second Pension without having to make contributions, which would help to compensate women for their time out of the workplace.


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