New research has found that later-life divorce has a significant impact on people’s finances, with family lawyers uncovering that more than 200,000 people who divorce after the age of 50 are forced to delay their retirement. As a result, L&G, a UK financial services group, conducted 2,750 online interviews with divorced Brits, including 471 who had divorced after 49 years.
The company’s findings uncovered that a quarter of people who divorce after 50 find it more challenging to rebuild their savings “because they are past their peak earning”. While 13% believe they will “never financially recover” as a result, the experts are warning people to prepare themselves for the major change and organise their finances to ensure that they are not left struggling.
Lorna Shah, MD Retail Retirement, L&G, said: “Retirement incomes are being stretched further than ever as people live longer and often enter retirement without sufficient savings. A divorce can make this challenge more complex.
“Our research shows that separating later in life can influence both immediate finances and longer-term plans. With less time to rebuild savings, many people adjust their expectations: delaying retirement, downsizing their home, or accepting a smaller income than they’d planned for.”
The company found that on average those divorcing “later in life” found that their incomes fell by £7,753 in the year following their divorce, which can have a big knock on effect on their retirement.
Findings also revealed that those who divorce over the age of 50 expect to live on a lower income in retirement than originally planned, while a third have to downsize their home as a result.
Fortunately, there are ways you can secure your financial future.
Ms Shah added: “However, there are positive steps people can take to protect their financial future. Pensions are often one of the most valuable assets a couple has and should be considered in the same way as the family home during a separation.
“Only 8% of people who divorced after 50 sought advice on this, yet expert guidance can help ensure decisions are balance and that both partners understand the long-term implications.”
The expert advises that those going through a divorce at any stage of life should begin by setting a realistic budget that accounts for new living expenses, legal fees, shared debts, and any ongoing commitments.
Ensure that you have a “complete understanding” of any costs you’ll incur during the divorce and that it covers everything, such as a Clean Break Order, and that protects your finances in the future.
Another check you should make sure to do is a review of all your assets, including pensions, “to ensure that nothing is overlooked in the settlement”. And finally, the expert advises that any important documents, including a will and life insurance policies, be updated to reflect the named beneficiary’s new circumstances.