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The £76,000 Cost Of Divorce For Retired Couples

Divorce can seriously damage your retirement wealth, according to new research.

Figures reveal that the cost of divorce is £3,800 a year or a massive £76,000 for the average retirement lasting 20 years.

Splitting up with your spouse also means you are more likely to retire in debt and with less pension savings that a married couple.

The startling figures come from a study by life and pensions giant Prudential.

Researchers found that 65-year-old divorcees retiring in 2018 expect to have an annual pension income of £17,600, compared to £21,400 for those that have never divorced.

More debt and less savings

And official statistics show that the rate of divorce is climbing for the over 55s.

Data from the Pru highlights that 23% of divorced over 55s will carry an average £30,500 debt into retirement – while only 16% who have never divorced will have retirement debts. The bad news is staying married means bigger debts in retirement – an average £36,900.

Divorcees are more likely to have no pension savings on retirement (15%) than those who haven’t divorced (11%).

They are also a little more likely to be poorer, with around 14% of divorcees expecting incomes lower than the £192.27 a week, or £9,998 a year, compared with 12% of those who have never been divorced.

Splitting pensions is complicated

Clare Moffat, pensions specialist at Prudential, said: “Divorce can have a huge financial impact on people’s lives. Many may not realise that the cost of divorce can last well into retirement, as divorcees expect retirement incomes of nearly £4,000 less each year than those who have never been divorced.

“The stress of getting through a divorce can mean people understandably focus on the immediate priorities like living arrangements and childcare but a pension fund and income in retirement should also be a priority.

“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. For many more couples, the increase in value of pensions mean that it is often the largest asset. It goes without saying that advice is crucial as early as possible in any separation where couples have joint assets.”

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