06 Mar 2018
Divorcees who plan to stop work this year can expect an annual retirement income of £17,600 - £3,800 less than people who have never experienced a marriage break-up.
from a partner also means you are more likely to retire in debt and without
private pension savings.
New research from Prudential highlights the impact of the end of a marriage on pension saving.
The financial services company analysed the latest available divorce statistics from the Office of National Statistics.
It emerged that the number of people getting divorced has started to rise again and that those over the age of 55 saw the greatest increase in 2016 compared to 2015.
Those who have been divorced are more likely to retire in debt (23%) than those who have never been divorced (16%).
It’s not all bad news for divorcees though, as Prudential says they will tend to retire with lower debts (£30,500 compared with £36,900).
But divorcees are more likely to have no pension savings at all when they retire (15%) than those who haven’t been through a divorce (11%).
And they’re less likely to reach the minimum standard for annual income announced by the Joseph Rowntree Foundation.
Around 14% who have been divorced expect to have incomes lower than the benchmark of £192.27 a week, or £9,998 a year, compared with 12% of those who have never been divorced.
Clare Moffat, a pensions specialist at Prudential, 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.”
Aberdein Considine offers both legal and financial services all under one roof.