Women entitled to higher State Pension on divorce.
A divorced woman may be able to substitute her ex-husband’s National Insurance record for her own up to the date of their divorce when working out her Basic State Pension, thereby increasing her own entitlement.
Analysis by consultants Lane, Clark and Peacock (LCP) suggests tens of thousands of women who divorce later in life could be missing out.
The issue arises for divorced women who reached state pension age before 6 April 2016 and fall under the ‘old’ state pension rules.
The rules if you divorced before 6 April 2016
You may be able to use the National Insurance contribution record of your ex-spouse or ex-civil partner to help increase your Basic State Pension if you're divorced or if you have dissolved your civil partnership. This won't affect your ex-spouse or ex-partner's Basic State Pension. If you remarry or form a new civil partnership before you reach State Pension age, you lose this right. Different rules apply to the Additional State Pension.
This makes significant provision for divorced women, but only if they notify the Department for Work and Pensions (DWP) of their divorce.
Over the course of a 20-year retirement, this can increase their state pension income by more than £50,000.
LCP says there is worrying evidence that many may not be aware of this or may be put off when they try.
How do I notify the DWP?
You can contact the Pension Service online or you can call them on 0800 731 0469.
Where can I find out more?
Rules: You can learn more about the Basic State Pension and the Additional State Pension on the government website.
Guidance: The Pensions Advisory Service provides independent and impartial information and guidance about pensions, free of charge, to members of the public. They can answer general questions but cannot provide financial advice.
Divorce advice: At AV Trinity our IFAs have a wealth of experience of providing independent financial advice to people on their divorce finances, including to women on what they are entitled to in respect of their husband’s State Pension and private (including company) pension provision. You can contact us for a free initial conversation, or learn more about our divorce service on our website.
We strongly advise any woman who reached State Pension age before 6 April 2016 and has since got divorced to contact the DWP if she is not on a full Basic State Pension to see if she is entitled to an increase based on her ex-husband’s contributions.
This article offers information about financial planning and should not be taken as personal advice.