International Women’s Day 2025 – Accelerate Action

International Women’s Day 2025 focuses on ‘Accelerate Action’, highlighting that it will take until 2158 to achieve full gender parity, according to the World Economic Forum.  The theme calls for ‘increased momentum and urgency in addressing systemic barriers and biases that women face, both in professional and personal spheres’.  Applying that theme to ‘personal spheres’, to what extent, if any, is there a reflection of barriers and biases for women experiencing divorce?

Divorce is a significant life-changing event that can have a profound impact on individuals on many different levels – emotionally, psychologically, physically and financially.  There is no doubt that there is much to consider when facing divorce as decisions taken during the process will be both short-term and long-term.  When dividing assets, the two main goals are to meet each spouse’s practical and financial needs and to achieve fairness.  The concept of ‘fairness’, while objective from a judge’s perspective, is of course, very subjective for the couple who are divorcing. 

By virtue of the Matrimonial Causes Act 1973, upon saying ‘I do’, each spouse has legal claims against the other for income, capital, property and pension in life and on death.  Financial resolution as part of divorce proceedings seeks to settle each of these claims to meet an individual’s needs.

Most commonly, in marriages with children, women will often work part-time to balance roles as parent and spouse. Women will have taken maternity leave, often more than once and up to a year at a time.  This may have to some, or a significant, extent impacted on their ability to progress their career and contribute towards workplace pensions – quite apart from the already present gender pay gap.  While the other parent can and does take parental leave, the period for which they are out of the workplace as a parent is usually far less than that of a wife.  Once permanently separated, both parents have to work together to provide care for their children but even then it can be very difficult for women to escalate their careers at speed to get on a par with their spouses’s earnings and pension savings.  A recent gender pension gap survey by Legal & General determined that, on average, a woman in her 50s will retire with approximately £39,654 of pension savings compared to men of this age group who have the more comfortable sum of £84,205. 

Divorce inevitably requires a downsizing by both spouses, but women continue to be disproportionately more affected.  There will be an inevitable decline in household income, with women far more impacted than men, usually reflective of the gender pay gap (currently 7.7%), career interruptions due to childbirth and parenting, and how marital assets are divided.  It is also not unusual for some women to have less knowledge of marital finances if these have been managed mainly by their spouse during the marriage. 

It is hugely important for women experiencing divorce to properly explore all their financial options and think short-term and long-term.  Very often, the focus of women during divorce is to meet their most immediate needs and secure housing for themselves and their children.  This can sometimes be at the expense of longer-term financial security. While a home is, of course needed for the whole of life, so is an income to maintain that home, yet that is a gap that often appears for women in divorce.  With lower career earnings and a much smaller pension, life post-retirement may be tricky.  While there may be the option to downsize and release some equity in their home, that pot only lasts for a finite amount of time and, depending on the housing market, may or may not provide enough funds. 

It is critical, therefore, that women experiencing divorce take not just quality legal advice but also financial advice, which can and should include pensions advice, to understand the costs of living that lay ahead and to think about how those costs may be met.  Pensions as assets to be shared should never be ignored because they offer future security.  It may also be helpful to undertake cash flow modelling exercises to establish what is needed now and in the future and the extent to which this can be met with the available assets.  Where there may be a later shortfall, forewarned is forearmed, and women are then aware of the need to plan in the years ahead.  An additional benefit of using a good quality lawyer and financial advisor is the objectivity they can provide in what are otherwise difficult and emotive times for the spouses.  Gentle probing and stress testing can lead to better future proofing.

Prettys’ Family Team offers a comprehensive selection of forums to resolve disputes between couples to encourage focus on careful financial management, improved future relations, and constructive co-parenting.  Whether working round table, collaboratively, ‘kitchen table’ or in mediation, a team is built around the individual to find creative, thoughtful and tailored solutions to ease couples through separation and divorce. You can contact me at grayment@prettys.co.uk.