Why every woman should prepare for divorce

Posted: Friday September 25 2020

By: Lisa Vaughan

Why every married woman should prepare for divorce

For most married couples, talking about divorce is probably the last thing that they want to do. However, money is a common reason for marriage breakdowns in the UK. A poll of over 2,000 British adults by a legal firm found that money worries top the list of reasons why married couples split up, with one in five saying it was the biggest cause of marital issues [1]


Gaps in working life

Women will often be the one to take on the caring responsibilities, whether this is for children, grandchildren or elderly relatives. This means they may work less or not at all, and their income is likely to be lower. This is one reason why the gender pay gap sits at around 17%[2].  If women are working less and earning less, they are less likely to have as much opportunity to save for themselves and their future.

Retirement provision

In the UK, women currently retire with one-fifth of the pension wealth of men[3] and research from Scottish Widows found that 40% of women stated that their retirement prospects worsened because of divorce[4].

Understandably, many women may prepare for a joint retirement, with plans to rely on their spouse’s pension in later life. Because of this they may not have been fully involved with financial decisions that related to retirement planning.  However, with the rising number of those over than 65 getting divorced[5], many women could find themselves without the financial safety net that they were once counting on.

Dividing assets

During the process of divorce, you are usually asked to make a list of all of your individual and joint assets and liabilities. It’s not compulsory to split pensions, and some settlements leave the pension out of the arrangement entirely.  You could therefore be at risk of having less income than expected in retirement, if your retirement provision is less than that of your spouse.

Sit down and talk

Planning for retirement should be a joint process by listing your individual and joint assets including pension savings.   It may not seem like the most romantic way to spend your time together, but discussions now will go a long way towards securing your future.

For many women, the first time they seek financial advice is upon divorce or the death of a spouse. Engaging with an adviser now could help you to ensure that as a couple and individually, you can look forward to a secure retirement and hopefully a long and happy marriage.

Lisa Vaughan FPFS

Chartered Financial Planner

www.lisavaughanfp.co.uk

 

[1] “As ‘Divorce Day’ Looms, Money Worries Top List of Reasons Why Married Couples Will Split in 2018”, Slater and Gordon Lawyers January 2018, 2000 surveyed.

[1] Gender pay gap in the UK, 2019 – https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/genderpaygapintheuk/2019

[1] Securing the future of the next generation, CII, Insuring Women’s Futures, 2016

[1] Pensions in divorce – women lose out on £5bn every year”, Scottish Widows, 2017 (5315 people surveyed)

[1] Marriage and divorce on the rise at 65 and over” ONS, 2017

# Why every woman should prepare for divorce

Lisa Vaughan Financial Planning Ltd. is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products