This spring marks the biggest shake-up of divorce laws since the 1960s. Having been delayed from the
autumn, the Divorce, Dissolution and Separation Act 2020 (or ‘No-fault Divorce Bill’) is set to come into play on April 6th 2022. The change has been universally welcomed, but what does it mean for divorced women’s financial futures?
The no-blame game
The new act seeks, in short, to reduce family conflict and speed up the divorce process – putting an end to needless “blame games” by giving a spouse or couple the power to make a statement of irretrievable breakdown. Currently, one party has to make accusations about the other’s conduct, or otherwise face years of separation before a divorce is granted, so the change is designed to reduce conflict, and help families move forward as constructively as possible.
But, it’s important to remember that divorced women still risk financial vulnerability. We’re all aware of the gender pay gap, but it’s only part of the picture. Having babies, raising children, running a household and caring for older family members can further hinder women’s earning, saving and investing potential, meaning that they are likely to retire with a 40.3% smaller pension pot than the average man’s.1 And divorce can make the picture even less rosy – divorced women’s median pension wealth at retirement is just 25% of that of their male counterparts.2
Planning ahead is smart, not pessimistic
In a happy marriage, you could be forgiven for not having divorce as a hot topic of conversation with your partner. However, there’s actually some merit in having that chat, with a view to future-proofing your retirement plan. That way, you’ve both covered all bases should the worst come to the worst.
A financial adviser can help you stay ahead of the planning game, rather than leaving it all to sort upon divorce, so you’re not caught on the back foot. Remember, ladies: ‘Self’ isn’t selfish!
And, should the worst happen, it’s important to take financial advice during the divorce proceedings. I’ve previously written about the import-ance of ladies having a financial adviser on their power teams, and financial guidance can really come into its own in ensuring that all aspects of a divorce settlement are covered – and for that all-important guidance and stability.
Contact me today for a no-obligation chat!
1 Achieving Gender Equality in Pensions, Prospect 2020
2 NOW: Pensions, 2020