FAMILY lawyers have welcomed signs that the Lord Chancellor will propose that pension funds should be split between separating couples.

The current amendment being fronted by the National Association for Pension Funds is a revised version of a proposal put forward by the Law Society in conjunction with the Society for Family Lawyers Association. The initial proposal was made in debates leading up to the Pension Act 1995.

Campaigners say pension funds should be split to offer both parties a guaranteed income on their retirement to the end of their own lives. The Lord Chancellor has said he would act sympathetically on the issue but is likely to meet resistance from members of the Government who believe that splitting pension funds will lead to a tax incentive to divorce.

Previous Treasury opposition to the proposals on grounds of huge administrative costs was countered by reports that savings in the greater number of people no longer relying on income related benefits would amount to around £70 million.

Nigel Shepherd, chair of the SFLA, said: “The Pension Act 1995 earmarked pensions for the future but it didn't go far enough. Pension splitting has our support. It is a good sign that the Government has now acknowledged that it is cost neutral.”

Mark Harper, a family lawyer at Anthony Gold, Lerman & Muirhead, said: “I don't believe that government concerns over people divorcing to get tax benefits is a relevant issue. Who would do that? The telling point, however, is that the Government has accepted that pension splitting would be cost neutral. Pension splitting would be very complicated and a lot of time would be needed to think this through.”