Divorce is a difficult experience for any couple, but increasingly money and financial arrangements become entwined in difficult and hostile situations.

1. The real cost of
divorce

2. Divorce is a difficult experience for any couple, but increasingly money and
financial arrangements become entwined in difficult and hostile situations.
Over 40% of first marriages end in divorce according to the Office for National Statistics
but what has been especially notable in recent months is the rise of over-60s who are
getting divorced. While reasons such as empty nest syndrome have been suggested to
explain the rise, it is important to consider that it is common in a formal separation for a
female partner to find themselves in the more difficult position financially. This is most
apparent in retirement where women are more likely to lose out on pension income.
Divorce proceedings, in their simplest terms, often come down to the distribution of
wealth and while women are increasingly becoming more financially independent it
remains important that the assets of any marriage are divided fair and equally.

3. Often the main pension holder and
breadwinner is the husband and the wife is
awarded a one-off lump sum or matrimonial
home rather than a regular income to prepare
them for retirement. As this is a relatively
simple division, many are tempted to accept it
but it remains vital that both parties seek
impartial specialist advice, as while the
matrimonial home may seem like the most
attractive asset, it is rarely the case and
provides relatively little long term security for
the future. Though the lump sum might seem
the best option at the time, both parties need
to consider financial planning for the future
rather than the present.
An important consideration for retired couples
who go through a marriage break up is to
address any imbalance in their pension
provision. As women statistically shoulder a
larger share of family responsibilities during a
relationship they are most likely to have
reduced their working hours or have sacrificed
their professional careers in some way.
With a reduced income, it is not uncommon
for one partner to be drawing from a much
smaller pension pot than the other.

4. As there is no legal requirement for a pension to
be split, irrespective of the circumstances,
addressing this at the outset is advised.
Inevitably divorce is an incredibly emotional and
often upsetting experience, but financial
wrangles shouldn't mean that arguments,
accusations and stress continue for months or
even years on end. With the right financial plans
in place and an efficient method of forward
planning, the arduous process need not cost so
much financially as it does emotionally.
If you are going through a divorce, speak to
your financial planner. They will be able to help
you to start building your finances for your new
future. If you don’t have a financial planner
email us at letstalk@sanlam.co.uk
This article is for information purposes and should not be
treated as advice. Individual circumstances should always
be considered prior to purchasing any financial products. For
further information please contact your Wealth Planner.
Sanlam is a trading name of Sanlam Wealth Planning UK
Ltd (Reg. in England 3879955) and English Mutual Ltd (Reg.
in England 6685913). English Mutual Ltd is an appointed
representative of Sanlam Wealth Planning UK Ltd which is
authorised and regulated by the Financial Conduct Authority.