No matter your age, divorce is a challenging life event that can be both financially and emotionally draining.

There’s no getting around the fact that most of us would rather avoid this eventuality altogether – but if you are getting divorced, there are ways you can be proactive and regain control over your life and finances.

However, new research suggests that “grey divorce” rates are higher than you might think. Legal & General reports that in 2021 (the latest available data), 1 in 4 took place over the age of 50.

Divorcing over 50 could present its own unique challenges. Here are five ways this situation could affect your wealth, and how a financial planner might be able to offer support.

1. If you’ve been married for decades, you likely have several shared assets that will now need to be divided

Dividing assets on divorce is an important part of the process. But if you and your spouse or civil partner have been together for many years, asset sharing could present a greater challenge than it does to younger couples.

It’s likely that you and your spouse share:

• A home, or several properties
• Savings accounts
• Protection policies, including joint critical illness cover and income protection
• Other valuable belongings such as a car.

With so much to divide, it could take weeks or months to come to an agreement. This may even increase the likelihood of legal proceedings becoming necessary, if you can’t come to a decision between you.

2. You may need to draw funds from your retirement pot to pay for legal fees

If you’re engaging the services of legal professionals to complete your divorce, this comes at a cost.

Figures published by MoneyHelper in December 2023 say that:

• Uncontested divorces (which don’t involve professional legal support) could cost between £1,300 and £2,600 for the petitioner, and between £400 to £800 if you’re the respondent.
• If you need to hire a solicitor, the fees can increase substantially. The initial court fee is £275, but solicitors may charge between £10,000 and £15,000 for only a few court appearances.

For anyone, no matter their life stage, these fees are substantial. But if you’re about to retire or are already accessing your pension, using your retirement fund to pay these costs could put your quality of life at risk down the line.

With a finite pot from which to draw money that is designed to sustain your lifestyle for as long as you need, spending £15,000 or more on legal services may affect your future plans.

3. Pension sharing could be more complex if one or both parties is already taking their benefits

On the subject of pensions, these assets may be discussed as part of your divorce settlement – although according to PensionsAge, more than two-thirds of couples don’t put pensions on the table at all.

Seeing as your pensions could be some of the most substantial assets to your name, and you’ll likely be discussing the sharing of property wealth too, it’s crucial to talk about whether pensions could be shared to reach a fair settlement.

For instance, some couples opt for one person to take ownership of their shared home, while the other may acquire both people’s pensions to even the split.

But with each decision related to pension sharing, comes consequences for your retirement. Giving up your pension wealth on divorce when you’re on the cusp of retiring, or are already taking your benefits, could put your future viability at risk.

So, discussing your financial options with a financial planner as a later-life divorcee could be of vital importance. A professional can help you weigh up your choices and ensure you separate from your partner with the wealth you need to fund the retirement you deserve.

Read more: What is “lifestyle financial planning” and how could it help you achieve your goals?

4. Retiring as a single person could be more costly

The Pensions and Retirement Living Standards (PLSA) report for 2024 reveals that retiring as a single person could cost more each year than retiring as part of a couple.

According to the report, a “comfortable” standard of living – which involves two weeks’ holiday in Europe each year, regular beauty treatments, theatre trips, and £80 a week on meals out – costs a couple £59,000 a year, or £29,500 each. But for a single person to achieve the same lifestyle, it would cost £43,100 a year.

This annual disparity of £13,600 adds up over time – for a 25-year retirement, this means a single person would need £340,000 more in their fund to achieve the same lifestyle as someone who lives with their spouse or partner.

If you’re getting divorced, it is essential to take a step back and re-evaluate your income, expenses, and goals. You might consider downsizing your home to reduce costs, and could think about pushing back your retirement date (if you aren’t already retired) to save more.

Planning a single retirement without help, however, can lead to knee-jerk decisions that aren’t backed by data. That’s where professional guidance may prove invaluable: a thorough review of your assets and income could help you make informed choices that support your retirement goals as a single person.

5. Your estate plan might need to change

Divorce can be an all-encompassing life event that makes it hard to think about the long-term future. But if you’re going through it later in life, you might want to cast your mind ahead and think about your estate plan, also known as your inheritance plan.

If you and your ex-spouse or civil partner share children, having a conversation about your inheritance plans could benefit all parties both emotionally and financially.

Plus, there’s Inheritance Tax (IHT) to consider. When you were married, your nil-rate bands – the allowances within which you can pass down money IHT-free – could be combined. As a single person, you’ll only benefit from your individual nil-rate bands, potentially increasing the likelihood of your estate being subject to IHT when you pass away. What’s more, due to changes to the IHT regime in the 2024 Autumn Budget, diligent estate planning is now all the more crucial for everyone, not just divorced individuals.

Finally, if you have a will that names your ex-spouse as the executor and sole beneficiary of your estate, you may want to alter this to reflect your new wishes.

Talk to a financial planner if you’re going through a divorce over 50 (or at any age)

Working with an impartial professional who has your best interest at heart could be of huge benefit when you’re getting divorced – particularly if this is likely to affect your retirement plans.

Email me on a.douglass@grosvenorconsultancy.co.uk or call my office on 01793 766 123. Alternatively, call my mobile on 07525 177 046.

While I offer high standards of service and will work with you to ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, or will writing.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.