More than 200,000 people who divorce after the age of 50 are forced to delay their retirement as a result, new research from L&G has revealed.
Later-life divorce is on the rise, accounting for 17% of all divorces. On average, those divorcing later in life found that their incomes fell by £7,753 in the year following their divorce.
One in four (24%) people who divorced after age 50 say it is harder to rebuild savings because they are past their peak earning years. More than one in 10 (13%) estimate they will never financially recover.
L&G’s research found that a quarter (23%) of those who divorce over the age of 50 also expect to live on a lower income in retirement than originally planned, while a third (32%) will need to downsize their home as a result.
Despite the role pensions can play in supporting long-term financial wellbeing, only a quarter (25%) of over-50s include them in settlement discussions and 31% waive rights to their partner’s pension entirely. However, just 8% seek financial advice before making these decisions.
Lorna Shah, managing director retail retirement at 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.
“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.”
