Retirement. A concept that seems a long way off for most people. Especially as the retirement age for claiming a state pension is now 66.
So how does this affect divorcing couples?
As this article highlights, many couples will be relying on the pensions they have accumulated throughout their marriage as their income on retirement, however a recent survey carried out by Prudential shows that divorcees planning to retire this year can expect annual retirement incomes of up to 16 per cent, or £3,000, lower than those who have never divorced, and they are also more likely to be in debt.
When a couple is deciding to divorce, the pension can be one of the most valuable assets to take into consideration. Research shows that it is usually one of the spouses who has accumulated the pension throughout the marriage with a view to this being used for both parties along with the other assets from the marriage.
However, pension sharing is becoming increasingly popular given recent pension changes and the increased flexibility of some pensions. If a pension share is implemented, the parties may end up with far less than they expected to retire with had they remained together.
Another factor to consider is the increase in divorce rates among women aged 55 and over- a large proportion of whom will be planning their retirement or already retired. This can be a pretty terrifying time for them as they have no provisions set up for their own retirement and were relying on the pension of their husbands.
If a couple are deciding to divorce, it is therefore crucial to look at any pensions and consider the implications of the separation on both parties retirement and what their needs will be.
Divorcees planning to retire this year can expect annual retirement incomes of up to 16 per cent, or £3,000, lower than those who have never divorced, and they are also more likely to be in debt......