According to research from the Office for National Statistics' (ONS) divorce is increasing in the UK, particularly among people aged over 60.
Divorce in later life can have a huge impact on a person’s finances, particularly once someone reaches retirement age.
As such, financial advisers need to be aware how divorce can affect retirement.
In order to provide clients with the best possible guidance, and help them build a successful financial future after a separation, financial advisers need to understand the complexities of divorce.
There are many factors to consider, such as the impact of an unfair settlement on someone’s retirement lifestyle, how men and women have different financial challenges post-divorce, and the tendency to turn to friends and family for help before seeking formal advice.
Legal & General Financial Advice recently conducted research which found that more than one-third (38 per cent) of over-50s consider their divorce to be financially unfair, yet just 3 per cent of people seek financial advice when going through the process.
If people do take financial advice, they often find it a positive experience.
But the fact remains that, over-50s are four times as likely to seek advice from friends when going through a divorce as they are from a financial adviser.
It is important that we, as an industry, understand the reasons for this and help clients understand that the earlier they take advice, the better their outcome is likely to be.
A rise in divorce for the over 60s
>In order to provide clients with the best possible guidance, and help them build a successful financial future after a separation, financial advisers need to understand the complexities of divorce.
National statistics show that divorce is on the rise in those over 60 years old and, as a result, the median age of divorce has also risen.
ONS findings suggest that we have seen a change in cultural attitudes, not only to marriage but also a far more understanding and empathetic attitude towards divorce.
This has been a key factor in people pursuing a new life through separation, particularly among older generations. Our research indicates that one in four divorces happen once someone is over the age of 50.
It won’t come as a surprise to financial advisers that Covid-19 has undoubtedly had an 'accelerator effect' on couples’ divorcing.
2020 has been a particularly tough year for many people. Anxiety levels have been high, as people have had to live in closer quarters and struggled without their usual support networks.
Citizens Advice say the coronavirus pandemic is creating an enormous strain on relationships – with views of its divorce webpage increasing by 25 per cent in the first weekend in September, compared with the same date in 2019.
As more people look at how to separate, advisers can play a key role, ensuring all assets are taken into consideration and that assets are fairly divided.
