Holy Matri-money – 280,000 recent divorces delayed due to money struggles

• To mark Divorce Day (6th January), Legal & General has revealed that one in six recent divorces (280,000 -17%) were delayed for financial reasons
• Divorce hits hard: annual incomes drop by an average of £9,000 in the first year after a separation
• 40% of divorcees believe the process is financially unfair, yet only 7% seek financial advice
• Nearly 900,000 divorced people in the UK have forgotten to update their will to exclude a former flame

New research from Legal & General Retail to mark Divorce Day¹ (Monday 6th January) – where family lawyers report a spike in inquiries following the festive season – has found that 280,000 recent divorces were postponed due to financial pressures. This means that 17% of all divorces that happened in the last five years were deferred because of money worries.

Couples across the country stalled their separation because of income concerns (13%), rising living expenses (12%) and the cost of divorce (12%).

Divorce shrinks incomes by 30%

However, once couples did part ways, they were often worse off financially. On average, half of all divorcees (45%) see their incomes shrink in the year after divorce, by an average of 30%. This can leave someone with £9,229 less a year to live on as they face increased expenses from living costs (29%), separation costs (23%) and even from taking time off work to deal with the emotional fallout of breaking up (18%).

Just the cost of the divorce alone comes with a £2,500 price tag and one in seven people (15%) will go into debt to fund it.

Divorces are ‘financially unfair’ but lack of advice leads to separation slip-ups

In two out of five divorces (41%), people felt that it wasn’t an equal divorce financially, with one party being favoured. Despite this, just 7% of people will consult a financial adviser as part of their divorce, leaving many vulnerable to money missteps that could have long-term consequences.

The research highlights the most common financial pitfalls for separating couples as they untangle their assets:

• Waiving rights to pensions: While divorcing couples often consider the value of their family home (50%), just 13% consider pensions when dividing assets with their partners and 23% actively waive their rights to the value of their pension. 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.
• Leaving yourself open to a future financial claim: Only 31% of people who have divorced have signed Clean Break Orders, leaving two-thirds (69%) exposed to future financial claims from their ex.
• Forgetting to update your will: One in 10 people who have divorced (897,000 - 11%) has either delayed or forgotten to remove their ex-partner from their will, risking unintended inheritance disputes. Many people have also forgotten to remove their former spouse as the beneficiary to their pension (11%) or life insurance (10%).

References

¹Opinium Research conducted 2,945 online interviews of UK adults who are divorced. The research was conducted between the 25th October and 12th November 2024.