The Divorce Gap – women see incomes fall by 33% following divorce, compared to just 18% for men

• Women see their annual income fall by almost twice as much as men following divorce
• Women are significantly more likely to waive rights to a partner’s pension as part of a divorce (28% women vs 19%)
• Women are more likely to face financial struggle post-divorce (31% women vs 21%) and worry about the impact on their retirement (16% women vs 10%)
• Office for National Statistics data shows, on average, women already have a significantly smaller pension pot than men

There are many reasons driving this disparity, one being that women are typically paid less, whilst men who divorce are far more likely to have been the primary breadwinner in the relationship (74% men vs. 18%). This is why women will likely feel a greater degree of financial burden if transitioning to a single-income household.

Women are more likely to face financial struggles following a divorce from their partner (31% women vs. 21%) and this is particularly true for older women who divorce. One in four divorces occur after the age of 50 and women are significantly more likely to worry about the impact of their divorce on their retirement (16% women vs 10%).

While there is only a slight difference in the number of men and women who feel that the division of their finances at the point of divorce was fair and equitable (54% men and 49% women), the research has found that many women may be signing over their rights to a key financial asset. Women are significantly more likely to waive their rights to a partner’s pension as part of their divorce (28% women vs 19%). This could have a significant long-term impact, particularly as women tend to have less personal pension wealth, according to the most recent findings from the Office for National Statistics (ONS) [2]. ONS data shows that men currently below the State Pension age have higher (£25,300) median active pension wealth than women (£20,000). Meanwhile, for those aged 65 years and over, median pension wealth for pensions in payment for men is double that for women (£223,933 for men vs. £112,967) [3].

Debora Price, Professor of Social Gerontology at the University of Manchester, has been working on a Survival Guide to pensions for divorcing couples. She said: “We know very little about pension outcomes after divorce and so this report is a very welcome addition to the knowledge base.

“Divorce is such an emotional time and people have so much to think about that they often just can’t focus on the pensions. But it’s vital for people to find out how much they are worth and to think about how to divide them fairly – for many people they are worth more than the family home. Ignoring them, or trading them away without ever knowing their true value, is often a terrible route for women, who may well end up in poverty in later life as a result. They are part of the assets that a couple has built up together, and the law says that they must be properly thought about.”

The guide, produced by Law for Life and the Pensions Advisory Group, will be available on the following link later in January - https://www.advicenow.org.uk/guides/survival-guide-pensions-divorce - helpful advice is available there in the meantime.

Divorce is a leading cause of debt issues and Legal & General Financial Advice is now working in partnership with StepChange, the UK’s leading debt charity, which offers free and independent debt advice. Anyone concerned about debt issues can contact StepChange directly on 0800 1381111.

The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.