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Home Finance Has pandemic put the brakes on a silver splitter surge?

Has pandemic put the brakes on a silver splitter surge?

by wrich gbaf
  • In 2020 there were 103,592 divorces in England and Wales – a 4.5% decrease from 2019.
  • Family court activities were hit by the pandemic which may have impacted the number of divorces that were completed in 2020.
  • Divorces among opposite-sex couples decreased by 4.8% but divorces among same-sex couples hit 1154 in 2020 – a 40.4% increases from 2019.
  • There were 7,846 divorces for marriages lasting more than 30 years in 2020. A steep decline on 8,915 granted a year earlier.

Today the ONS has released data on divorces in England and Wales https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/divorce/datasets/divorcesinenglandandwales

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown:

“Divorce continues to decrease though we don’t know as yet what impact the pandemic has had. There was a steep decline in the number of divorces for marriages lasting more than 30 years – the so-called silver splitters. This was a group that previously bucked the trend of decreasing divorce as many decided that once the children had left home and retirement beckoned they no longer wanted to be together. Whether we will see an increase in next year’s figures as family courts get back to work remains to be seen.

It can be hard to start again at any age but the older you are when you split the less time you have to get your finances back on an even keel. Divorce is a messy and expensive process and both partners will have a significant task to rebuild their finances afterwards – something that is often under-estimated.

While property is often the focal point of any divorce discussions, more time needs to be spent on longer-term issues such as pensions and other investments. It is often the case that women rely on their partner’s pension as they stay home to look after children and so when they divorce, they can leave themselves financially vulnerable in their later years. While many can continue to work, others can’t, and retirement can be a real struggle. Both partners also face an uphill struggle to rebuild savings, tackle debt and rebuild retirement plans in the aftermath of a divorce which can take a long time to recover from.”

Five steps to get back on your feet financially after divorce

  1. Rebuild your savings: Divorce can be horribly expensive, so there’s every chance you’ve drained your emergency savings down to the dregs. It means that one of your first priorities afterwards is to build an emergency savings safety net of 3-6 months’ worth of essential expenses in an instant access savings account.
  2. Tackle expensive debts: Sometimes couples will have debts that are split during the divorce process, and sometimes they’ll end up borrowing as a result of juggling a smaller budget with legal costs. If you have expensive debts, repaying them should be your top priority. Make sure you keep up with minimum repayments, and then prioritise the most expensive debt first. If your debts are too big to tackle without help, it’s worth speaking to a debt charity like Stepchange.
  3. Review your protection: Think about your new protection needs. If you’re paying child maintenance, you may need life insurance to cover payments in the event of your death. Likewise, if you’re receiving spousal maintenance, you may want insurance to cover your ex’s life. You may need to change your nomination of beneficiaries for your pensions and work-based death in service benefits.
  4. Redo your will: Divorce nullifies any wills, so you need to make a new one as quickly as possible to ensure your estate will be divided according to your wishes.
  5. Revisit your overall position: After a divorce you will need to revisit your longer-term savings and investments too, and review the damage done. You may well need to rebuild your portfolio or your pension, and rethink your plans for retirement, so the sooner you start, the better.