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New pension rules for divorced women

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The new pension system for those that retire after April 2016 has changed the way divorced women can calculate the amount of state pension that they will receive. The new regulations have been described as simpler, but divorced women in the Greater Manchester area may wish to examine the effect these changes will have on their financial situation when they come to retirement.

The new regulations have removed the right of a divorced woman to use her ex-husband's national insurance record for the period of their marriage when claiming her state pension. In the past, if a couple were together for a long time and then divorced shortly before reaching retirement age, the wife could have received almost the full state pension. The change in the rules means that, unless she has made a significant amount of NI contributions in her own right, a divorced woman may receive a much smaller state pension than she had expected.

Another change that will affect many women is the removal of a state pension based on their husband's contributions. If their husband's had paid the necessary NI contributions during their career, on their retirement, their wives could expect to receive 60 per cent rate of the full state pension themselves. For couples retiring after April 2016, the income the wives receive will be based on the NI contributions that they themselves have made.

The importance for women of ensuring that the value of a married couple's pension is included in the negotiations around a divorce settlement has been highlighted by the new state pension system. Expectations of their financial situation at retirement may need to be revisited, and they may find that taking advice from a solicitor well-versed in the new regulations as they apply to family law cases may be in their interests.