Under a fifth (17%) of all divorces in the past five years were deferred due to money worries, with only 7% of people consulting a financial adviser as part of their divorce.
This is according to research from Legal & General (L&G) Retail, which also found that 41% of people felt that it was not an equal divorce financially.
L&G Retail said that by not consulting an adviser during the process can “leave many vulnerable to money missteps that could have long-term consequences”.
This research has been released today (January 6) as it marks Divorce Day, where family lawyers report a spike in divorce inquiries following the festive season.
Couples across the country stalled their separation due to income concerns (13%), rising living expenses (12%) and the cost of divorce (12%).
The cost of divorce comes in at £2,500 according to L&G Retail, with 15% going into debt to fund it.
Additionally, once couples did legally separate, 45% saw their incomes shrink in the year after divorce, by an average of 30%.
One of the most common financial pitfalls for separating couples was the issues surrounding pensions. Half of divorcing couples often consider the value of their family home, but only 13% consider pensions when dividing assets with their partners and 23% actively waive their rights to the value of their pension.
L&G Retail said: “This can have a huge impact in later life, particularly if one partner stayed at home to take on childcare, or other caring responsibilities, during the marriage, leaving them with less in their own retirement pot.”
Also 31% of people who have divorced have signed Clean Break Orders, leaving 69% exposed to future financial claims from their ex-spouse.
Furthermore, 11% either delayed or forgot to remove their ex-partner from their will, “risking unintended inheritance disputes”. Also, many people have also forgotten to remove their former spouse as the beneficiary to their pension (11%) or life insurance (10%).
L&G Retail chief customer & strategy officer Paula Llewellyn said: “We understandably focus much of our energy on the emotional side of separation but, as our research shows, money is an important factor that shouldn’t be ignored. Not only are people having to stay in marriages longer, because of their finances, but they are also facing increased struggles once they go it alone.
“A divorce is as much a dissolution of a legal contract as it is the end of a relationship. If you’re going through a divorce, careful planning is essential to protect your future and, if you are having to delay your plans, use the time to get your finances in order – we’ve produced a financial health check tool to help you.
“There are lots of things to consider and a qualified financial adviser might be the best person to speak to, to make sure nothing is overlooked and that the divorce is fair and equal for all involved.”
In order to obtain these results, L&G Retail commissioned Opinium Research to conducted 2,945 online interviews of UK adults who are divorced in October to November 2024.
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