The Divorce Gap – women see their household income drop twice as much as men, following divorce

• Women are more likely to face financial struggle post-divorce (24% women vs 18%) and have greater concerns about meeting essential costs (21% women vs 13%)
• Women are significantly more likely to waive rights to a partner’s pension as part of a divorce, creating potential risk in retirement

Women are likely to see their annual household income take a serious financial hit in the first year following their divorce, falling by an estimated 41%, compared to just 21% for men, according to research from Legal & General Retail¹.

The disparity between men and women is caused by a number of factors, one being that men are more likely to be the main breadwinner in families (70% vs. 21% of women), and commonly earn more. This presents a challenge as couples separate their finances and fund two separate households.

One in four women financially struggle post-divorce (24%) compared to their male counterparts (18%), leading to increased likelihood of worries about the cost of essentials (21% vs. 13% of men).

While men and women tend to agree that the division of their finances at the point of divorce is fair and equitable (53% men and 46% women), the research has found that many women may be signing over their rights to a key financial asset.

Despite the pressures on their finances, women are significantly more likely to waive their rights to a partner’s pension as part of a separation (30% women vs. 17%). This raises concerns about the ability of women who are divorcing to fund their retirement, due to a significant gap in pension wealth at the time of divorce.

According to the figures, women saved an average of £23,000 into their pension pot at the point of divorce, compared with £60,000 by men.

References

¹Opinium Research conducted research between 20^th November to 4^th December 2023, among a nationally representative panel of 2,750 UK adults who are divorced.