Posted: 31/03/21 by Hawsons Chartered Accountants
Women face the larger financial burden
Divorce can be a very difficult time emotionally and financially for those involved. It can be especially difficult in later life due to the fact that married couples will have built up financial assets together. These joint financial assets are likely to include bank accounts, insurance policies, investments, shares, and your home. However, in most cases of later-life divorce, it is women that face the larger financial burden.
The gender pay gap and the motherhood penalty
Despite positive changes towards attitudes to women in the workforce, there is still a large gender pay gap, recently calculated to be 15.5%. In addition, women who choose to take time out of work to raise children will be less financially independent and will face further struggles when they return to work due to a changing environment, skills gap, and prejudice. The combined effect of these issues is likely to be that women will have fewer savings and a smaller pension pot than men.
Research has found that on average, women in their 60’s will retire with around £51,000 in pension savings, compared to £156,000 for men. This demonstrates that on average men will retire with more than three times the wealth of women. Following a divorce, a woman’s income will fall on average by 33%, compared to 18% for men. Despite the financial inequalities women face during their lifetime, nearly 25% intentionally relinquish their rights to their partner’s pension in the divorce settlement. Considering the financial inequalities they face, giving up the right to their partner’s pension can be a particularly poor choice for women and can often result in poverty in later life.
How do I find financial fairness?
Financial advisors can help smooth the divorce process and achieve financial fairness. A specialist advisor can help identify the correct financial options for their clients. The earlier you introduce a financial advisor into your divorce proceedings the more value they will be able to provide for you.
How can we help?
At Hawsons Wealth Management, our team of financial advisors are able to provide you with highly professional, fully independent, tailored advice to help you secure your financial future.
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