How is wealth divided in high net worth divorce?
Succession Wealth analysed the Office for National Statistics’ Wealth and Assets Survey data and the number of divorces in England and Wales, to estimate the makeup of the assets of divorcing couples whose net financial wealth is £1 million or more.
They found that 550 couples with a net financial wealth of one million pounds or more will divorce each year and estimate that collectively these individuals have around £1.91 billion of net wealth, equating to an average of about £3.48 million per couple.
Their wealth was divided into four broad categories: financial wealth, property wealth, physical wealth and private pension wealth. ‘Financial wealth’ means cash and savings-type assets, such as bonds, shares and so on, ‘property wealth’ means real property (i.e., land and buildings) and ‘physical wealth’ means other valuable physical assets, such as cars, jewellery and paintings.
The breakdown was as follows: financial wealth represented 20% of the assets, worth on average about £712,000, property wealth represented 31% of the assets, worth on average about £1,075,000, physical wealth represented 5% of the assets, worth on average about £186,000, and private pension wealth represented a whopping 43% of the assets, worth on average about one and a half million pounds. In other words, private pension wealth is by some margin the most significant asset of many couples whose net financial wealth is £1 million or more.