Rise in later-life divorces poses threat to retirement finances

{"text":[[{"start":6.84,"text":"The length of time couples in England and Wales remain married before divorcing is getting longer, recent data shows, which advisers warn has ramifications for financial security in retirement."}],[{"start":18.02,"text":"Some 27,000 separations — or one in four heterosexual divorces — came after 20 years of marriage in 2025, according to data from the Office for National Statistics, the largest share in more than 50 years. About 8,750 splits took place after 30 years."}],[{"start":23.44,"text":"While incidents of separation still peak at about seven years of marriage, the rise of so-called “grey divorce” often carries an extra financial sting, since there is less time to rebuild wealth before retirement, said Rebecca Williams, financial planning divisional lead at Rathbones, the wealth manager."}],[{"start":53.4,"text":"Paula Llewellyn, chief executive of defined contribution and workplace savings at Legal & General, said that those divorcing later in life see their incomes fall by an average of £7,753 in the year following their divorce and almost a quarter expect to live on a lower income in retirement than they had originally planned as a direct result of their break-up."}],[{"start":74.28,"text":"Often it is women who lose out the most, said Ciara Pugh, partner at Stowe Family Law. In longer marriages, the “gender pensions gap” will typically be in favour of the male earner, she added. Divorced women have median pension wealth of £65,192, compared with £150,434 for divorced men, according to data from the Pensions Policy Institute."}],[{"start":98.04,"text":"“Not every woman approaching divorce is the financially weaker partner,” said Williams. “Increasingly, some women are the higher earners, have the larger pension and hold more of the family’s wealth.” Yet they can still be surprised to discover that assets they regarded as the products of their own career success can form part of the marital pot to be divided, she added."}],[{"start":null,"text":"

"}],[{"start":118.28,"text":"Spouses can often be left worse off by prioritising the wrong things during the divorce negotiations. David Gallagher, head of pensions at law firm Fieldfisher, said that putting too much emphasis on the more visible components of wealth during divorce, such as cash and the family home, at the expense of pension provision can have significantly negative implications for retirement plans and a person’s overall long-term financial security."}],[{"start":140.4,"text":"“It is therefore crucial for couples who have decided to separate to consider and clearly understand the value of their pension rights. This means deciding with their advisers if pension sharing should form part of the overall settlement,” he added."}],[{"start":155.72,"text":"“We regularly see cases where a wife will not ask for a share of her husband’s pension, despite having very little in her personal retirement fund,” said Pugh."}],[{"start":164.72,"text":"“There is a lot of misunderstanding around pensions in divorce, and our main bugbear is that people, particularly women, don’t think they have a right to ask. They do.”"}],[{"start":175.74,"text":"The rise of blended families has also complicated matters. Property, pensions, investments, inheritance plans and retirement income all need to be reconsidered, while wills and beneficiary nominations may need updating."}],[{"start":189.08,"text":"Almost half of blended families describe inheritance planning as complex, reflecting the “difficult decisions” families can face when balancing the needs of a new partner with the desire to provide for children from previous relationships, according to research from Rathbones."}],[{"start":204.12,"text":"“Assets that children may once have expected to inherit can ultimately pass elsewhere if wills and estate plans have not kept pace with changing family circumstances,” Williams added."}],[{"start":215.12,"text":"Meanwhile, the negative financial impact of divorce has caused many to put off separating in the first place. Research from L&G shows that many couples who divorce over the age of 50 delay their separation because the financial burden can be so significant."}],[{"start":230.72,"text":"Pugh said the number of couples choosing to stay together because of fears they cannot afford to go their separate ways was “higher than ever”."}],[{"start":243.04,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793497348_2347.mp3"}