New research from Prudential shows that divorcees who plan to retire in 2018 can expect their yearly income to drop by £3,800 compared to those who have never divorced, highlighting the impact of marriage breakdown on pension saving.
Prudential’s annual study, running over the last eleven years has tracked the finances, future plans and aspirations of those planning to retire in the year ahead. For the 2018 cohort, £17,600 was the expected annual retirement income from their pension for those who have previously been divorced, compared to £21,400 for those who have never experienced a marriage break up.
Prudential also considered divorcees other financial circumstances, noting that those who have been divorced are more likely to retire in debt (23 per cent) than those who have never been divorced (16 per cent), albeit those debt levels are likely to be lower (£30,500 compared with £36,900). Around one in seven (14 per cent) who have been divorced expect to have incomes lower than the Joseph Rowntree Foundation‘s benchmark of £192.27 a week, or £9,998 a year, compared with 12 per cent of those who have never been divorced.
The “Lady from the Pru”, Clare Moffat, pensions specialist, 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.”
Serving Bedford and the surrounding villages, together with our office in central London, the solicitors at Hunter and Uro Solicitors can help you with any family law matter, including those concerning your pension and financial assets. If you would like to speak to one of our solicitors to discuss your case, contact us on 01234 889777 or 0207 177 9777.