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Women divorced in later life may be missing out on substantial state pensions

Tens of thousands of women who divorce later in life may be missing out on huge sums in state pension rights because of a "complex and little understood system", according to analysis from the financial consultancy LCP.

During 1998 to 2018, more than 100,000 women aged 60 or over divorced according to figures from the Office for National Statistics. The vast majority of these women reached state pension age before 6th April 2016 and come under the 'old' state pension system which makes significant provision for divorced women. But if they divorce after pension age they benefit from a pension uplift only if they notify DWP of their divorce. There is worrying evidence, says LCP, that many may not be aware of this or are deterred from doing so.

LCP explains that under the old state pension system, a married woman who divorced can substitute her former husband's National Insurance record for her own up the date of their divorce for purposes of working out her basic state pension. This very often results in a significant uplift which might, over the course of a twenty year retirement, amount to more than £50,000.

For women who divorced (and did not remarry) before state pension age, any 'substitution' based on her former husband's NI record should have taken place when she claimed her state pension. But where women divorce post-retirement, there is no automatic process for an uplift to take place.

Steve Webb of LCP is now urging women who divorced over pension age and who reached pension age before 6th April 2016 to make sure that they notify the DWP as a matter of urgency in order to get their state pension reviewed.

For more information on this matter, consult the LCP website by clicking here.