Divorces leave many financially disadvantaged
Nearly half (41%) of divorces result in one party feeling financially disadvantaged, yet only 7% of individuals consult a financial adviser during the process, according to research*. This lack of expert guidance leaves many at risk of significant financial oversights with potential long-term implications.
Key financial pitfalls in divorce
Recent findings highlighted common errors divorcing couples make when dividing assets:
• Overlooking Pensions: While 50% of couples prioritise the family home, only 13% include pensions in settlements. Alarmingly, nearly a quarter (23%) waive their rights to their partner’s pension altogether.
• Failing to Update Documents: Approximately 11% of divorced individuals either forget or delay removing their ex-partner from their Will, which can lead to inheritance disputes. Similarly, 11% neglect updating pension beneficiary details, and 10% fail to revise life insurance policies, risking unintended financial outcomes.
Expert Divorce financial advice from Smith & Pinching
Matt Goddard, Associate Director and Chartered Financial Planner emphasised the importance of addressing financial matters during a divorce.
“We often focus on the emotional aspects of separation, but as research shows, financial considerations are just as important. Many are avoiding filing for divorce and staying in marriages longer due to financial constraints. This often creates greater struggles when they separate.”
We encourage individuals to prioritise financial planning during this time to safeguard their future.
Practical steps for divorcing couples
To avoid financial pitfalls:
1. Setting a realistic budget: Account for new living expenses, legal fees, shared debts, and other ongoing commitments.
2. Understanding divorce costs: Ensure all expenses, including a Clean Break Order, are accounted for to secure financial independence.
3. Reviewing all assets: Along with the marital home, pensions should be considered in the settlement process.
4. Updating key documents: Speak to your solicitor to update your Will and contact life insurance policy providers to ensure beneficiaries align with your new circumstances.
How we can help?
There are many considerations in a divorce, and one of our Chartered Financial Planners who specialise in Divorce Financial Planning can help ensure a fair financial settlement.
Seeking professional financial advice early during a divorce can make a significant difference in avoiding costly mistakes and securing a stable financial future.
Call 01603 789966 or email [email protected]