Today is the first working Monday of January, also known as “divorce day” amongst family lawyers, and one of the busiest times for firms across the country as they prepare for a surge of enquiries following the festive period.
This year is expected to be much busier however, as lawyers expect an increase in separating couples wishing to take advantage of the new no-fault divorce legislation which becomes effective on 6th April.
But experts also say that because the average age of divorcing couples is on the increase, and is the highest it has ever been (47.7 years for men and 45.3 years for women) lawyers should expect an influx of enquiries from older couples that also bring with them extra asset considerations.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown commented:
“The average age of divorce has risen almost four years over the past decade, so that the average man getting divorced is almost 49 and the average woman over 45.
When you’re older you face two major risks from divorce. The first is that you’ve spent longer building assets, so you have more to lose. And the second is that you have less time to get your finances in order afterwards. Over 13,000 people over the age of 60 got divorced in 2019, which is a difficult age to be starting over.
One key consideration is what to do with pensions. In many cases, it’s one of the largest assets built up during the marriage – often largely in the name of one person – and if it involves defined benefit pensions it can be fiendishly difficult to value. It means you need to understand your options when it comes to splitting pensions, to make sure your divorce doesn’t derail retirement, and you may well need to see a financial adviser as well as a lawyer.”
Rebecca O’Connor, Head of Pensions & Savings, interactive investor, says:
“Many people don’t know that a pension is considered a joint asset, even if only one spouse has built it up. Often, women will choose to take the home and will let their ex-husband keep the pension.
At the time, this might seem like an advantageous split, but when it comes to retirement income, the partner who took the property rather than the pension has no income to live on, even though they have a house to live in. They might end up having to sell the house to generate the income they need.
It’s really important that both partners understand the long-term implications of how they split the pension assets as well as property and do not overlook the value a pension has later on in life.”