Cost of divorce felt well into retirement, survey finds
1 March 2018
Divorcees set to retire in 2018 can expect a yearly income of nearly £4,000 lower than those who’ve never divorced, new research from Prudential has shown.
Prudential’s annual study, Class of 2018, found expected annual retirement income for those who previously been divorced is £17,600, compared with £21,400 for those who have never experienced a marriage break up.
Statistics released by the Office of National Statistics found that the number of people getting divorced is on the up, and those over the age of 55 saw the greatest increase in 2016 compared to 2015.
Divorcees are more likely to retire in debt (23%), than those who have never been divorced (16%). They are also more likely to have no pension savings at all when they retire (15%) and less likely to meet the minimum standard for their annual income, according to the level set by Joseph Rowntree Foundation. Around one in seven who have been divorced is expected to receive less than £192.27 a week.
Clare Moffat, pensions specialist at Prudential (pictured), said: “Divorce can have a huge financial impact on people’s lives. Many may not realise that the cost of divorce can last well into retirement, as divorcees expect retirement incomes of nearly £4,000 less each year than those who have never been divorced.
“The stress of getting through a divorce can mean people understandably focus on the immediate priorities like living arrangements and childcare but a pension fund and income in retirement should also be a priority. A pension fund is one of the most complex assets a couple will have to split so anyone going through a divorce should seek legal and financial advice to help them do so. For many more couples, the increase in value of pensions mean that it is often the largest asset. It goes without saying that advice is crucial as early as possible in any separation where couples have joint assets.”
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