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Counting the cost of divorce for the over 60s

Divorce for the over 60s

 Silver splitters are on the rise, screamed a recent headline, and statistically its true with ONS research revealing an increase in the number of men divorcing aged 65 up 23 per cent, and a 38 per cent increase for women.* 

 But away from the headlines, what are the implications of choosing to divorce for the over 60s? Divorce can be difficult at my age, but there are additional areas to consider for people approaching retirement age or older.  

Things to consider about divorce for the over 60s

For those looking to divorce in a later stage of life, you may have a more complex financial situation to consider because you have been married for many years, during which assets have been acquired and built up over a long period of time.  

For example,  

  • The division of a family home that is close to being or is mortgage-free  

  • Your reduced mortgage capacity because of your age  

  • A revaluation of your plans to retire and what that will look like going forward  

  • Options for your pension and how best to share this asset  

  • Adult children who continue to live in the family home and/or need financial support from you.  

  • Tax implications for investments you may have   

  • Income disparity between you and your spouse, for example, if one of you adjusted their working life to accommodate greater care of the children.  

  • Cost of future care, your Will and inheritance planning  

 The divorce process is the same regardless of how long you’ve been married or your age, but it is the significant financial implications for you and your family, which will need careful consideration and planning.    

 A clear understanding of your  circumstances  

 To make the best decisions, you must clearly understand both you and your spouse’s financial position and circumstances.  

 You both need a complete picture of your assets before considering how best to divide them.  

This information should include:  

  •  A valuation of your property  

  • Your income from all sources 

  • An expenditure budget  

  • Details of all investments  

  • Bank accounts and savings 

  • Pension valuation  

Your future goals  

Once a clear financial picture is in place, you can then receive full legal advice regarding your options for splitting assets. It is often sensible to obtain independent financial advice alongside this.  

When doing so, think about what you are hoping your future will look like, for example:  

  •  Where will you live?  

  • When do you wish to retire?  

  • What income will you need to meet your needs?  

  • Would you consider keeping a large share of your pension in return for less of the property or vice versa?  

 It is important that you keep focused on the big picture and what you are trying to achieve.  

 Pension planning  

Pensions are often a significant asset, and when approaching retirement age, they need very careful consideration. 

They are a complex issue as there are many types of pensions with different benefits and terms.  Pensions can be shared based on value or income, and when approaching retirement age, it is more usual to split the pensions on the basis of income.  

The pension freedoms allow those accessing their pension from the age of 55 greater flexibility of their options, and when looking at this, there may be tax implications to be aware of. 

If one of you has drawn your pension and the other has not, it can create an income gap. In those circumstances, options may include further employment, supplementing payments, deferring the pension share or further liquidity of pensions. 

It is important not to overlook the state pension. The basic state pension cannot be split or shared on divorce. However, the additional state pension or protected payment element of the new state pension can be shared. 

You may have a pension outside of the UK, and in those circumstances,  you cannot obtain a pension share in the UK, so alternative options will be needed.  

It is often sensible to invest in independent financial advice and a pension sharing report by an actuary.  The report can consider all pensions (including the state pension) and advise on the best options for sharing or offsetting your pension, enabling you to make decisions that best protect your retirement income and plans.  

Read more about pensions and divorce. 

Reaching an agreement  on divorce for the over 60s

There are several ways to reach an agreement over financial issues when getting a divorce. 

You may be able to agree on the terms with each other, or your lawyer can forward proposals and negotiate on your behalf.  If that is not possible, mediation is a very useful tool and involves using an independent, professionally trained mediator to help you reach an agreement. 

The mediator provides pragmatic guidance and information to support both parties as a third-party neutral. It gives couples greater control of the outcomes and decisions concerning their finances on a fair and amicable basis.

Mediation has adapted to the current climate, and virtual online remote family mediation services are available. 

If an agreement cannot be reached for whatever reason, you may have to make an application to the court who will decide for you both. 

Second marriages 

If you look to remarry in the future, you will need to update your Will as it won’t be valid upon remarriage, and this will be imperative to protect your inheritance plans for your children.  

If you have assets from a previous relationship that you wish to protect, you may want to enter into a nuptial agreement.  

Focus on what you want to achieve

If you are considering a divorce or separation at any age, you must have all relevant financial information to enable you to obtain legal and financial advice on the best options for you, your circumstances and your family. 

To achieve an amicable agreement, focus on the big picture of what you are trying to achieve, discuss the options and practice good communication to reach a solution.  

Get in touch 

If you would like advice on divorce for the over 60s, please contact our Client Care Team here, who can put you in contact with a specialist divorce lawyer.

Gemma specialises in financial settlements following a relationship breakdown including pensions, property international assets, spousal maintenance and businesses. She is also experienced in challenging Child Law matters along with surrogacy and adoption.

Get in touch

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