Delayed divorces can quietly erode people’s finances, especially for those in their 50s and 60s. The cost of divorce during a lengthy separation can also have a significant impact on people’s future retirement income. However, with some early, joined‑up planning between solicitors and financial planners, you can look forward to a fairer settlement. We examine the issues that can arise when prolonged divorces erode people’s financial security.
According to research by Legal & General, 280,000 divorces were delayed at the start of 2026 due to financial pressures affecting settlements. With only a few couples in this group actively seeking financial advice, it’s vital that individuals get professional financial advice.
“One in six divorces delayed”
Legal & General
Who suffers most financially in a divorce?
A lengthy divorce can be expensive for both parties, but especially older women who still face a gender income and pensions gap. Many people resort to drawing funds from their retirement savings to pay for legal fees. Retirement for single people is more costly than for a couple, so any remaining savings may have to stretch further.
When a couple has been married for decades, they will naturally have a number of shared assets. This might include their home, joint savings accounts and insurance policies, and other valuable possessions like a car.
During a divorce, splitting one household into two can be very expensive. With the added pressures of rising house prices and the cost‑of‑living, funding two separate homes can be challenging for even middle earners. As a result, many people postpone separation and stay living together in a financially strained state of limbo. This can lead to emotional distress for the couple, and it can create extra financial difficulties in reaching a settlement.
During this limbo period, some people pause their pension contributions, draw more heavily on savings or credit, or postpone investment decisions. However, such actions can reduce the time for funds to grow, increasing the risk of running out of money in retirement.
With hundreds of thousands of people delaying divorce proceedings due to cost‑of‑living pressures, a growing number of mid‑life and later‑life couples carry unresolved joint debts. As property and pensions can influence a divorce settlement, these areas also need to be included within financial disclosures. A poorly structured settlement could result in someone having to work longer, retire later, and downsize considerably post-divorce.
“Annual incomes drop by an average of £9,000 in the first year after separation”
Legal & General
What is the biggest mistake during a divorce?
As divorce is an emotional process, it’s common to make mistakes when it comes to financial settlements. In Legal & General’s research, they found some worrying figures:
- Only 13% consider their pensions when dividing assets.
- 23% waive their rights to pensions, which will have a direct impact on their retirement income.
- 69% could be liable for future claims from their ex-partners because they haven’t included Clean Break Orders within their divorce settlements.
It’s important to get professional advice early on in proceedings to ensure you have covered every area of your finances. Delays to divorce proceedings in the short term could have a significant impact on your living costs, future retirement income, and your legacy.
“11% haven’t updated their wills”
Legal & General
Does divorce automatically revoke a will?
There are some common misconceptions about the impact on a will from divorce or a civil partnership dissolution. Although marriage automatically revokes a will, divorce doesn’t. For inheritance purposes, your existing will remains valid, but your ex-partner would be treated as if they’d died. And if you haven’t specified what happens upon their ‘death’, then the rules of intestacy would apply, dictating who will inherit from your estate.
Failing to update your will after a divorce or dissolution can cause inheritance disputes, especially if you live with a new partner without remarrying. As an example, if you still own property as joint tenants, this passes directly to the surviving owner, which could be your ex-partner. Therefore, if you are living in a property jointly owned by your ex-partner, your new partner could become homeless.
“Nearly 900,000 divorced individuals in the UK have not updated their wills to exclude former partners.”
Legal & General
Fixed fee financial advice
Divorce or dissolution of a civil partnership can be a traumatic experience, especially when children are involved. By getting professional financial advice before you reach a settlement, you can reduce the emotional toll on your family. You can also avoid common pitfalls that could cost you in the long run and have a significant impact on your retirement and legacy.
At Balance: Wealth Planning, we offer sympathetic, fixed fee financial advice, giving you full transparency during a difficult time. Our financial planning team will help you manage your finances in a tax-efficient way, so you have enough to live on today and when you retire. We’ll carry out a cash-flow planning exercise so you are prepared for all future scenarios.
Are you a solicitor looking to partner with a chartered financial planner to help support your clients? We’d love to hear from you to see how we can help you support your clients.
If you’re getting divorced and need financial planning for a settlement, get in touch to speak to our financial planners.
Sources:
https://www.aviva.co.uk/financial-advice/pension-advice/knowledge-centre/pensions-and-divorce/
https://saracenssolicitors.co.uk/grey-divorce-in-the-uk-pensions-property-and-a-secure-next-chapter/
https://www.irwinmitchell.com/personal/guides/will-guide/divorce
https://alicedouglass.co.uk/5-ways-a-grey-divorce-might-affect-your-finances/
https://www.wbg.org.uk/article/the-financial-reality-facing-women-on-divorce/
