The study, which highlights the impact of marriage breakdown on pension, found that divorcees who plan to retire in 2018 can expect their yearly income to drop by £3,800 compared to those who’ve never divorced (£17,600 compared to £21,400).
In addition, 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 their annual income set by the Joseph Rowntree Foundation (JRF). Around one in seven (14%) who have been divorced expect to have incomes lower than the JRF’s benchmark of £192.27 a week, or £9,998 a year, compared with 12% of those who have never been divorced.
“Divorce can have a huge financial impact on people’s lives,” explained Clare Moffat, pensions specialist at Prudential. “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.”
“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,” she added. “For many more couples, the increase in value of pensions means 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.”
For expert legal advice on the division of assets, including pension, in divorce then contact our specialist family lawyers today.