One in three saw finances impacted by divorce

Research by Rathbones Group has found that nearly one in three (30%) saw their personal wealth fall as a result of their break-up in the past 10 years, while more than a quarter (26%) became wealthier after divorce.

The independent study found a third (33%) of men who got divorced in the past decade emerged wealthier as a result while 18% of women said their personal wealth increased after the end of their marriage. Around 36% of men said their personal wealth decreased after their divorce while 24% of women were worse off.

The study, which questioned 69 people who were divorced in the past 10 years, found recovering from divorce can be a lengthy process. Around one in five (20%) say it took three years or more while 14% admit they are not back on their feet yet.

More than two out five (42%) of those who got divorced in the past decade said they had stock market investments including pensions and ISAs but less than one in five (17%) consulted a wealth manager during their divorce.

Since the break-up around one in six (16%) say inheritance tax advice and issues have become more a priority for them as they adjust to their new financial situation.

The latest Government statistics show a rise of nearly 10% in the number of couples divorcing a year in England and Wales to 113,505. The figures for 2021 show nearly one in five couples will divorce within 10 years of marriage.

Faye Church, Chartered Senior Financial Planner at Investec Wealth & Investment, said “Finances play an important part of the divorce process and couples need support on ensuring that their finances are split equitably so that one partner does not end up substantially worse off.

“The study shows that for many, divorce leads to their personal wealth suffering and underlines the need for proper financial advice during the process. It is important to know the implications of keeping the family home versus a lion’s share of the pensions versus cash on deposit or investments; all have their advantages and disadvantages when it comes to liquidity, access and taxation. It is here were taking proper financial advice can add to most value and potentially provide a better outcome”