Divorce could leave you with £30,000 less in retirement

Lily Canter
·2 min read
Pensions can be low on the priority list when dividing assets during a divorce. Credit: Getty.
Pensions can be low on the priority list when dividing assets during a divorce. Photo: Getty.

More than a third of people aged over 50 see their income reduce after a divorce, with an average fall of £10,650 ($13,788).

And for 27% of divorcees this can lead to £30,000 less in retirement according to Legal & General's (LGEN.L) retail retirement report.

Almost a third of divorced people save less for retirement following a split — £57 per month on average. This equates to a £30,000 loss by the age of 70.

With one in four divorces happening after the age of 50, half a million people across the UK are saving less for their retirement.

READ MORE: UK savers set to miss out on millions in returns despite epic £75.5bn savings haul in lockdown

The coronavirus pandemic is having an impact on relationships according to Citizens Advice, with views of its divorce website up 25% in the first weekend of September compared to the previous year.

Legal & General's survey of 2,000 Brits over 50 found people often consider the value of their family home but can overlook their pensions and retirement savings when agreeing a financial split.

During a divorce, just 12% consider pensions when dividing assets with their partners and 24% actively waive their rights to the value of them.

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Only 31% sign clean break orders, meaning that more than two-thirds could be liable to a future claim from their ex-spouses.

The research found that the perceived difficulty of disentangling shared incomes and property was a key reason behind the fact that 33% of people delayed their divorce for longer than they would have hoped.

“When going through a divorce, people are understandably keen to come to a settlement and move on, but our research indicates that too frequently people do not fully consider the financial implications and how that might impact their future retirement," said Sara McLeish, CEO of Legal & General financial advice.