Pension changes could drive ‘silver splitter’ surge

A legal expert says pension reforms that make it easier for retirees to access their savings could lead to an increase in “silver splitter” divorces.

The reforms, which take effect in April, mean that from the age of 55, people will have the freedom to take their pension as a lump sum, or series of lump sums, rather than having to buy an annuity.

Nicola Harries, a partner at South East law firm Stevens & Bolton, told the Telegraph on 27 December that much easier access to lump sums from a pension pot could take the brakes off a decision to divorce, which a husband or wife might have held back from because they did not want to sell the family home and downsize when assets were split, due to lack of access to capital.

Ms Harries said: “If there are ways of addressing issues, particularly of capital, that may well encourage people to take a step they might not have taken.

“We often see people who will put their toe in the water for a bit of advice and then go away for a few years. But if they are aware that there are options on the table, I think that might [encourage] people.”

In 2013, the Office for National Statistics reported an increase in divorce rates among over-60s, in contrast to a general decline in divorces overall.

The new pensions environment is likely to create new issues when couples divorce and pension pots form part of their marital assets.

MT Financial Management offer a specialist pensions and divorce advisory service, which includes advising on the options available in relation to all types of pension in a divorce settlement and providing reports and recommendations.

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