The Prudential has recently conducted research which backs up the theory that divorce has a long-lasting financial impact. The Prudential has found that for those who have been through a divorce or separation, they can expect to be £2,100 a year poorer in retirement than those who have not gone through a separation.
Clare Moffat, Pension Specialist at Prudential, said: “Although the emotional impact of divorce may have long passed, it could come as a shock for people to find that it continues to impact them financially into their retirement.”
It is a known fact that couples are worse off following divorce than those that stay together. When going through a divorce, this invariably involves the breaking up of the family home and the associated costs of that, together with the costs of setting up a new home, which can have long-lasting financial consequences for both parties. Pensions are also regarded as a matrimonial asset and so are often shared upon divorce. This means that each party is going to come away with a smaller pension pot than they had before the separation. It is invariably the case that the pensions that have been shared will not recover because they are then so much smaller and as a consequence, this means that the income on retirement will be much smaller.
It is absolutely vital when going through a divorce to make sure that pensions are considered and are properly looked at to make sure they are shared fairly between the parties. There are different types of pension schemes, with some being much better than others, for example, A police pension or local government pension scheme is much more valuable than a private, non-contributory scheme. Whilst we cannot protect our clients from the negative impact of the financial consequences of a divorce, we can at least help them recover what they are entitled to and minimise, as much as possible, the reduction in their long-term pension.
How can the Family Law Team help you?
The Steeles Law Family law team take a down-to-earth, sensitive approach to family law matters. If you would like to take legal advice with regard to divorce or separation our specialist family lawyer will be able to advise you how to protect yourself and your family for the future, please email using email@example.com or by calling 01603 598000.
*The information provided in this article is designed to provide useful information on the subject, not to provide specific legal advice.