According to research carried out over a decade ago, the average income for women following divorce was found to drop by more than 20%. The same study (which included surveys carried out from 1991 to 2004) revealed that the poverty rate for separated women was more than three times that of divorced men.
Unfortunately, the disparity between men and women’s finances following separation doesn’t seem to have improved in recent years. A study by the Chartered Insurance Institute in 2017 found that women were left vulnerable by financial decisions made jointly during the relationship. Researchers also found that the average divorced woman has only a third of the pension pot of the average divorced man. Furthermore, most of the women in the UK’s lowest earning households have no pension savings at all.
Why does this happen?
The situation for women and divorce is very complex. There are a number of factors which can contribute to women being left worse-off both in terms of income and retirement savings. These include:
· Unfair financial settlements during divorce, and the impact of joint financial decisions made during the relationship.
· Poor pension planning – one survey found that more than 70% of couples don’t discuss their pension at all before divorce.
· Careless pension arrangements – for example, when both parties pay into a joint account during the relationship, and this is used to pay into a Self-Invested Personal Pension (SIPP) in the husband’s name. During divorce, it’s easy for pensions to be overlooked and the husband to take the whole SIPP – and the wife loses everything she’s paid into it over the years.
· The impact of childcare – women are more likely than men to have their careers disrupted by having children, which can lower their earning potential and their opportunity to build a financial safety net including savings and pensions.
How to redress the balance
The good news for divorcing women is that there are things you can do to safeguard your financial future. The most crucial step is to get good legal advice from a divorce solicitor you can trust.
Your lawyer can help you plan for a fair settlement, take a good look at pensions and negotiate on your behalf. You’ll get advice on all of your options, so you can make fully informed decisions.
There’s also the UK divorce system to consider. England and Wales are among the most popular places in the world to get divorced, because the system is designed to give both parties a fair chance of getting on with their lives. In fact, it favours those who have lesser assets in the marriage.
Through their understanding of this system, experts like Wirral divorce lawyer Tracey Miller are able to get the best possible results for all clients, whatever their financial situation. This means you’ll get a fair, liveable outcome from your divorce if you’re in need. And by the same token, you’ll avoid being over-penalised if you’re the one with the assets in the marriage.
Get in touch to find out how Tracey Miller Family Law can help – call 0151 515 3036 for a chat about your circumstances.