Beth Kirkland of Law for Life and Hilary Woodward, Honorary Senior Research Fellow, on behalf of the Pension Advisory Group
Back in 2014 the Nuffield Foundation funded the first empirical study of the use of pension sharing orders within divorce proceedings in England and Wales. The findings of that study were illuminating. The researchers found a widespread lack of confidence amongst practitioners on the issue of pensions on divorce. Close examination of a random selection of court files showed poor quality pension disclosure, unclear or inadequate valuations of the pensions that were disclosed, and a substantial proportion of potentially irrational or unfair outcomes.
Of the 369 court files with a final financial remedy order studied, 80% revealed at least one relevant pension and yet only 14% contained a pension order. The study confirmed that offsetting pensions against other capital assets remained the most common way of dealing with pensions, but there was little if any agreement on how the pensions or the offset should be valued.
The findings of the 2014 research project fuelled a broader conversation within the family law community and those working alongside – actuaries and financial advisers specialising in pensions on divorce – which eventually led to the creation of the Pension Advisory Group (PAG).
The PAG was an interdisciplinary working group chaired by Mr Justice Francis and His Honour Judge Edward Hess. The group brought together experienced members of the judiciary, solicitors, barristers, mediators, academics, financial advisers, actuaries and other pension experts. These professionals dedicated significant time and expertise to developing an in-depth analysis of how pensions on divorce should best be approached. Thanks to further funding from the Nuffield Foundation the PAG went on to consult, research, create and publish a comprehensive best practice guide to the treatment of pensions on divorce in England and Wales for professionals working in the field.
The PAG report was warmly received by the family law community including by the judiciary in cases where it has been described as ‘persuasive’. However, with ever increasing numbers of divorcing couples unable to afford the costs of legal advice or representation, it was recognised that many in need of help would not find or manage to use the report without a solicitor. To better meet this legal need, the Nuffield Foundation agreed to fund a user-centred version of the PAG report. The public legal education and information charity Law for Life was commissioned to work with the PAG to develop a step-by-step guide that litigants in person could navigate themselves to get a fairer outcome when it came to their pensions on divorce. This involved surveying Advicenow users, carrying out research on legal information provision and need in this area of law and piloting content with both PAG experts and experts by experience – Advicenow website users. Upon publication, this guide was made freely available to the general public via Law for Life’s Advicenow website.
Fast forward to 2024 and thanks again to funding from the Nuffield Foundation under the auspices of the School of Law, a huge amount of further consultation work, careful analysis and expertise have been put to good use in the creation of updated versions of both the PAG report to provide guidance for judges and practitioners and the Advicenow step-by-step guide aimed at assisting divorcing couples with limited or no access to a solicitor.
The PAG report is now well known within the family law community and is frequently referenced in cases that reach the financial remedy court – with the expectation of more consistency and clarity for all involved. However, The Fair Shares research findings, published in late 2023, show that there is a continuing need amongst the divorcing public, and particularly women, to better understand the value of any pensions when they divorce and how to get a fairer outcome for their post-divorce years. To this end, Law for Life will continue to promote and freely provide an up to date version of their guide on this complex area of family law that can have such a significant impact on divorced individuals in their retirement.