What are the dangers of DIY Divorce?
The introduction of no-fault divorce has led to a continued rise of DIY divorces where no input is provided from solicitors. Since April 2018 parties have been able to apply online for a divorce without using a solicitor to oversee the process.
If both parties agree to commence divorce proceedings and are comfortable applying for the divorce online, then it is not necessary to instruct a solicitor to represent either party in the divorce proceedings. The new no-fault divorce application has been designed to help separating couples complete a divorce application in a much easier and non-contentious way.
However, what can be overlooked is the fact that a DIY online divorce does not deal with issues relating to arrangements for children or how assets and liabilities will be divided.
When it comes to dividing assets on divorce, it is important to consider property, income, and pensions. In the four years since 2018, applications for pension sharing orders have fell by 35% despite a 1.6% increase in divorces, according to the Ministry of Justice figures. Pension sharing orders are an important part of financial proceedings and involve the party with the lower valued pension taking a share of the other parties’ pension.
The drop in pension orders which is linked to DIY divorces could be disastrous for women in particular as statistically they reach retirement with less money saved than men. Prospect estimate that in 2019-2020 there was a 37.9% gender pay gap in relation to pensions. Statistics also show that women who have divorced at pension age have less pension capital than women who have not divorced. This means female divorcees are worse off in retirement if pension positions are not considered carefully. Obtaining advice in relation to pensions at the time of the divorce can make the difference between a comfortable retirement and struggling financially.
If you are thinking of applying for a DIY divorce our top tips for dealing with pensions are:
- Do not overlook the value of pensions;
- Ensure both parties have disclosed their up-to-date pension valuations;
- Where appropriate, arrange for a Pension on Divorce Expert (PODE) to prepare a pension sharing report;
- Do not assume that the value of a pension is equivalent to the value of other assets such as the family home for the purpose of offsetting; and
- Arrange for any proposed asset split, including pensions, to be checked by a solicitor to ensure it is fair.
It is helpful to have an initial meeting with a solicitor to understand your rights and the full implications of any agreement. This is something we can offer you at Consilia Legal by way of a free initial consultation. We offer expert legal advice in relation to all divorce, financial and children matters.