Estimated read time: 4 minutes
A recent interim report by the Pensions UK published on 19 May 2026 suggests that more than three-quarters of people have not saved enough in their private pension pots to fund a “moderate” lifestyle in retirement.
The level needed to live even the “minimum” lifestyle will change
Currently, 15 million people are under saving for their retirement with those from low and middle earning bracket groups being most at risk.
According to the Pensions UK report, currently the following amounts are needed each year for Retirement Living Standards:
| Household Size | Minimum | Moderate | Comfortable |
| 1-person | £13,900 | £32,700 | £45,400 |
| 2-person | £22,500 | £34,400 | £62,700 |
The Retirement Living Standards does not include housing costs, i.e. for mortgage or rent, which can vary depending upon location and individual personal circumstances.
The lack of savings can be attributed to many factors, including the increase in the cost of living and wages not being fully reflective of inflation.
The level needed to live even the “minimum” lifestyle will change in years to come due to the ongoing impact of inflation.
The age of retirement is changing.
Before 2010, the age at which an individual could retire and draw down on their private pension, was 50. This increased to 55. From 6 April 2028, this will increase to 57 years of age.
The age at which an individual can claim their State Pension has also increased. In 2020, the age of eligibility for State Pension for both men and women increased to 66. Between 2026 and 2028, the State Pension age will be increased to 67.
The State Pension currently stands at £241.30 per week or approximately £12,548 a year for 2026/27, meaning that the State Pension on its own will not fully cover the “minimum” lifestyle for a one-person household.
The effect on separating couples.
When married couples separate, inevitably one or both will have paid into a private pension fund. Often, couples have inequal levels of savings in their private pension funds and at times, one spouse may have a nominal amount.
For separating couples, after the family home, private pension funds can be the next most valuable asset in the marriage.
When the law relating to the division of matrimonial assets, Matrimonial Causes Act 1973, came into force, the Family Court had no power to divide funds held in a private pension. The Family Court would often (and without any pension expert input) use the exercise of “offsetting”, usually offsetting the value of the family home against private pension fund.
This changed in 2000, allowing the Family Court to make a Pension Sharing or Pension Attachment Orders. The Family Court’s power extends to private pensions which are already in payment or have been drawn down.
How a private pension held by one or both spouses is dealt with is a complex area of law, which amongst factors must consider the needs of each spouse, ages of the parties including any disparity of age and the type of private pensions – i.e. contribution or benefit based. Adding to these complexities, can be public sector private pensions e.g. NHS, Teachers or Civil Service pensions.
Whilst, obtaining the Cash Equivalent Transfer Value (“CETV”) of a private pension is a helpful starting point, this may not be the most reliable valuation, particularly if the private pension is benefit based or a public sector pension where one scheme has been replaced with a new scheme.
At times, it is necessary to consider the instruction of a Pension on Divorce Expert (“PODE”) to prepare a report, particularly when a simplistic approach of carving of a private pension fund is going to result in inequality for one spouse.
How to avoid the minefield.
How a pension is divided or to be divided can be a minefield, even for the Family Court who have recognised that Family Law Judges are not in themselves experts in this area and they too need the input of expert advice.
It is therefore imperative for the interest of equality and fairness that early legal advice is sought from a specialist family law solicitor.
A divorce between spouses does not require a divorce from their pensions.
If you have any questions about divorce, division of matrimonial finances or other family law matter, I am a specialist family law solicitor and offer an initial free 15-minutes consultation. Please get in touch at: [email protected]