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Home Finance One in four could not cope in retirement without partner’s pension

One in four could not cope in retirement without partner’s pension

by uma


  • Only 41% of people could cope in retirement if they didn’t receive a share of their partner’s pension.
  • This plummets to around a quarter (26%) of women. Just over half (54%) of men said they could cope.
  • Just over a quarter (27%) of people said they couldn’t cope if they didn’t have a share of their partner’s pension. The remaining third (32%) were unsure.
  • The break-up of a relationship can lead to one partner missing out on pensions. They are often not discussed in divorce settlements.

Survey of 1400 people carried out by Opinium on behalf of HL in September 2022.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:

“It’s not uncommon in couples for one partner to take charge of certain aspects of your overall financial planning but relying on a partner’s pension risks leaving you in real financial difficulty. If you remain together forever, then it may well be fine to rely on a partner’s more generous pension provision, but if you were to split up then you could find yourself approaching retirement with very little.

It’s an issue that disproportionately affects women who already face significant challenges in building up pension provision as they are more likely to spend periods of time out of the workforce caring for family and, when they do return, it is often on a lower paid, part-time basis. If your partner has decent pension provision, it can be tempting to depend on that. As a result, our survey shows only around a quarter of women believe they would be ok if they didn’t have a share of their partner’s pension. This compares to more than half of men.

Pensions are rarely spoken about during divorce proceedings; more emphasis is usually placed on assets such as the main property as people look more towards the more immediate concerns around who lives where rather than looking longer-term. However, pensions can be one of the largest assets someone can have and so they should be an integral part of any negotiations. There are several ways a pension can be dealt with during divorce – it can be offset against another asset such as the family home, split between the partners or it can be paid out as an income once your partner reaches retirement.

Even if you and your partner live happily ever after it is still a good idea to build up your own pension. Not only will it boost your financial resilience in retirement it also means you will be less reliant on your partner for your income.”

How to boost your pension

Will your employer pay more in?

Many employers contribute at auto-enrolment minimum levels, but there are others who are willing to boost their contributions if you do in a process called matching. This can make a real difference to your pension so it’s worth checking with your new employer if they do this.

Pension planning as a couple

A spouse or partner can contribute to your pension which could be very useful during periods of time when you aren’t working. They can contribute up to £2,880 per year which will attract tax relief from the government topping it up to £3,600. This can be a good use of money from a tax point of view particularly if your partner has used up their own annual allowance. Over time, these amounts can really add up and significantly boost your pension.

Don’t lose track of old pensions

When we move jobs, it is easy to lose track of pensions we had with previous employers. Recent research from the Pensions Policy Institute shows there is an estimated £26bn of lost pension money washing around the system with the average pension pot worth over £9,000. Be sure to update your contact details with your workplace pensions and keep hold of paperwork. If you have lost track of a pension, then contact the government’s Pension Tracing Service on Find pension contact details – GOV.UK (www.gov.uk). You will need either your employer’s name or your pension provider and this service will give you contact details.

Boost your state pension

You currently need ten years’ worth of National Insurance contributions to qualify for a state pension and 35 years’ worth to get the full amount. However, many women in particular have gaps in their working record due to time out caring for family. You can buy voluntary National insurance contributions to fill gaps but it’s worth checking with DWP before handing over your money as you may find you qualify for a benefit -such as Child Benefit that comes with an automatic credit. Some women inadvertently missed out on these credits because their partner claimed Child Benefit in their name while others opted out to avoid paying the High-Income Child Benefit Tax Charge. However, you can apply to transfer credits between partners and there is now an option to opt out of receiving Child Benefit while still receiving the National Insurance credit.

Fill out an expression of wish form

An expression of wish form allows you to say who you would like to receive your pension death benefits when you die. If they are not kept up to date, there is a risk someone you didn’t intend to receive your death benefits -an ex-partner for instance – could get them rather than your current one. It’s a really important piece of administration that many people overlook. Recent HL research shows only 38% of people said they had kept expression of wish forms for all their pensions up to date.