'Divorced women may benefit' from changes to pensions

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'Divorced women may benefit' from changes to pensions

Fri 29th Aug 2008

Upcoming government changes to pensions could benefit divorced women, Standard Life has asserted.

Effective from April of next year, the restriction imposed on people who receive partial pension benefits from their ex-partner will be lifted.

Under the current regulations, part of these pension benefits cannot be taken as a tax-free lump sum or used by the non-member - which in many cases is the wife - before the age of 60. Meanwhile, the member can take 25 per cent of benefits as a tax-free sum and can first take them at the age of 50.

Calling the changes a "welcome development", Standard Life senior pensions policy manager Andrew Tully asserted that they will have many benefits.

"This change is long overdue and will be especially beneficial to women, who are more likely to receive pension benefits as part of a divorce settlement," he explained.

Mr Tully added that expert financial advice should be taken by people who are starting afresh after a divorce, as such an event can impact their financial future.

However, research recently published by Abbey has found that couples may be less likely to split up during times of economic uncertainty because of the increased cost of living alone.

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