Many women are disadvantaged when it comes to retirement. One reason for this tends to be because they may not have pensions that adequately cover their needs. This is called the gender pension gap. Often women’s careers become punctuated with time out to raise a family where they are not working, working part time, or earning below the auto enrolment pension threshold.

This is a problem that faces many women whether married or single but can be a thorny issue when it comes to divorce.

Pension sharing in financial resolution on divorce is a familiar concept. Parties can agree and Judges have the power to order pension sharing when the marriage ends, whether this is equally or in other shares, depending on the overall division of assets.

Division of pensions depends on whether the funds are marital or non-matrimonial property. Contributions made during the marriage usually classify as marital property, giving both parties a right to them. However, contributions made before the marriage or after separation may classify as non-matrimonial property and may not be open to sharing.

Dividing pensions can lead to tax consequences. Premature or ill-advised withdrawals can trigger penalties. Following court orders and consulting financial professionals helps ensure the division happens without unnecessary tax consequences.

Some parties opt for a pension share, which means pensions are split into two separate pots straight away on divorce. Each ex-spouse walks away with a share, which they control themselves from then onwards. This enables a clean break and ensures neither is left in the worst possible position when it comes to retirement or saving for retirement. But it can be relatively complicated, and requires a pension sharing order from the court, which will establish how the pension should be split.

When children are still young, and the priority is to maintain the family home some parties sacrifice their right to a pension share, to take more capital in the family home or the proceeds of sale to rehouse. Dividing pensions can be more complex because they involve future payments. To divide a pension and offset against other assets, the court may require an actuarial valuation from a pension expert. Depending on the circumstances, one party may receive a share of the future pension payments or an equivalent amount of another marital asset to balance the division.

In circumstances where property is preserved or one party receives a larger share of the capital for housing on divorce, it’s likely that later, when the children are grown and move out, they will have the option of downsizing to free up capital in retirement. Although this may sound harsh, the reality is that many people looking at retirement, whether married, divorced or widowed, recognise that they are over housed and move to property that is more manageable or smaller and frees up capital for retirement.

I am often asked what will happen if you or your ex remarry. If part of a pension has been transferred to an ex-partner under a pension sharing order, or you used pension offsetting, this won’t be affected if either of you remarries. The terms of the financial settlement you agreed to, or that the court approved, should list what happens if one of you marries someone else.

One piece of advice I regularly offer to people is to consider these financial issues at the beginning rather than the end (or close to the end) of a relationship. I know it can be so difficult, partly because frankly it doesn’t feel very romantic to talk about personal finances, let alone pensions, when making a relationship commitment. However, having an established plan for how to divide all assets if a separation or divorce were to occur can save a huge amount of time, stress and money in the long term. Most importantly, I have seen many circumstances whereby children, both young and mature, can get drawn into such disputes and even feel they must play a role in mediating. Avoiding this sort of disharmony can sometimes be the determining factor in maintaining happy family relationships.

Plan ahead to give yourself the best chance of relaxing birthdays, Christmas days, and other milestone events now and for years to come.