The flexibility brought by pension freedoms is thought to have given ‘silver splitters’ (older divorcees) the confidence to embark on single life.
Even though Prudential researchers estimate that UK Divorcees who plan to retire in 2018 will see their income to drop by £3,800-a-year.
“We are beginning to see many more people divorcing just prior to or during retirement,” said Richard Collins, family law partner at Charles Russell Speechlys, commenting on the research.
“With easier access to pensions and more flexibility on how pensions can be treated, couples now seem to be less wary about divorcing in their retirement years knowing that they have financial security and the free time to pursue the lives they wish to lead after divorce.
“I’ve seen people post-divorce relishing their independent financial status and seizing the opportunity to make financial decisions for themselves, knowing that they are building up wealth and securing their future.”
Divorce spike
According to the latest Office of National Statistics figures the number of people getting divorced has started to rise again and that those over the age of 55 saw the greatest increase in 2016 compared to 2015.
While in some cases Pension Freedoms are thought to have embolden decisions there are still expensive pitfalls.
According to Prudential divorcees are more likely to have no pension savings at all when they retire (15%) than those who haven’t been through a divorce (11%).
Divorcees are also more likely to be in debt although that burden is more likely to be lighter than their married and indebted peers.
Clare Moffat, pensions specialist at Prudential, said taking early advice was still being overlooked: “Many may not realise that the cost of divorce can last well into retirement.
“A pension fund is one of the most complex assets a couple will have to split so anyone going through a divorce should seek legal and financial advice to help them do so. Advice is crucial as early as possible in any separation where couples have joint assets.”
