A quarter of over 50s who divorce in England could seriously affect their retirement and later life plans, a recent survey from Legal & General has found.
Those in their 50s save £57 less on average each month towards retirement after they split. This adds up to £30,000 less by the age of 70.
The study also found that while over a third will see their incomes fall by an average of £10,650, just three percent take financial advice.
Additionally, more than two-thirds could be liable for a future claim from their ex-spouse.
As part of Talk Money Week, tax and family law specialists at UK law firm Irwin Mitchell have offered advice for those who could be affected by this.
Kelly Greig, a partner and head of later life planning at Irwin Mitchell, said: “Couples should take legal and financial advice on what effect their current arrangement together would have on their finances if one of them died.”
A popular inheritance tax measure for those in later life who are living together is to marry, to ensure that the survivor benefits from the spouse exemption.
“However, this can create unforeseen consequences as a divorcing spouse will have financial claims that an unmarried partner would not,” Ms Grieg warned.
“Some may not even view this as an issue – why would you want to leave your ex-spouse anything on your death? But it may useful to be able to do so; perhaps on a life interest trust that can be terminated, or tax-free, to be able to get more assets free of inheritance tax to your loved ones.”
For later life couples who have no intention to remarry, there are alternatives to divorce altogether, such as judicial separation.
Sarah Balfour, a family law partner at Irwin Mitchell, explained: “Crucially, a judicially separated spouse remains entitled to a widows or widower’s pension on death of the other.
“Judicial separation may give more effective options for inheritance planning, allowing the options mentioned above but each situation is individual and dependent on the circumstances involved, so joined up legal and financial advice is the key.”