Silver Splitters – In 2015
George Osbourne's pension reforms may have a slightly different impact to those he may have desired. Family lawyers are not only predicting they may give the older generation more freedom of choice regarding their pension, but also, could this freedom lead to divorce?
We've written articles on 'silver splitters'
before and how the number of divorces in the 'older' age brackets is increasing. We could never have predicted that the change in pension reforms would be cited as a reason for their increase!
John Pratley, partner at Simpson Millar LLP believes, "In reality, the new pension changes could increase divorce between the more mature spouses. We have already seen an increase in any event amongst that age bracket, mainly as a result of pension sharing having been available since 1999. This provides spouses generally with a share of the pensions acquired during the marriage."
The new changes proposed by the government will simply increase the range of investment options available. In the case of long marriages where spouses are more mature, generally, pensions are shared in such a way as to achieve equality of income in retirement. This no doubt may encourage spouses to separate in the knowledge they will have sufficient income.
Other Reasons Why Divorce Is Increasing
In contrast to previous generations, both spouses tend to have worked throughout the relationship and due to having more wealth there is an increased amount of equity in their property leading to more to share when the relationship breaks down. Fewer women are staying at home to look after children and are staying in the workplace, resulting in a swell in the pension pot they may not necessarily have been aware of.
There are a number of other reasons why older couples, particularly in their 60's
, are getting divorced at a faster rate than their counterparts. Despite the number of divorces falling over the past year, mature couples are still splitting at an increased rate.
John puts the increase in 'silver splitters' down to a number of things. "The fact that people are generally living longer, are in better health, the availability of social media which enables spouses in an unhappy marriage to now find potential new partners" could all be catalysts for the increase in divorce. John has personally been instructed by, "clients who have found their first love via social media and have divorced with a view to forming a relationship with an old flame".
Whether you're going through a divorce now or you're looking to split in the near future, it's important to consider the effects such a split will have on your pension. Ask your solicitor questions about your options
and what would work best to ensure that whatever the outcome, it's beneficial for you.