Retirement used to be a time for relaxation, travel and spending time with the grandchildren, but a study by Age UK and the International Longevity Centre highlights that that financial pressures in their ‘Golden Years’ are driving more couples to separate.
The research reveals that three in 10 or 1.1 million older people struggle with problem debt – and are twice as likely to suffer marital breakdown as those whose finances are under control.
It also highlights that 28% of people aged over 50 with debts were struggling to pay them back in 2010, compared with 23% in 2002. Poor returns on investments, dwindling savings and higher household costs have further reduced the options for people nearing retirement to settle their arrears.
Last year the Office for National Statistics found the proportion of couples splitting up in their 60s was up by 58 per cent on the previous year and is likely to keep rising.
Peter Jones, founder of Leeds based family law specialist Jones Myers LLP, says that the research points to some critical underlying financial issues that can make it especially difficult for the ‘silver separators’ to build new lives as single people.
“It may be the case that one partner has taken the lead on managing the couple’s financial affairs and the other party has been happy for them to do so. If they separate, as well as dealing with the emotional side of a break-up, one party may need additional support in order to make important decisions about their economic future if this is the first time they have had to consider these matters.
“When it comes to separation, many people do not know how much they own and owe. However, in circumstances where the divorce process is started by the other spouse, full details can be established at this time,” he added.
Peter says that most couples close to retirement will have paid off their mortgage but may need to adjust to the consequences of dividing the equity equally. In practical terms each party could be downsizing from a much loved family home, to a much smaller property.
A couple’s income after retirement is also a consideration.
“During the working years one party may well have built up a sizeable pension whilst the other stayed at home to bring up children. Invariably in this age group, it will have been the wife who has shouldered these responsibilities. During better economic times pension planning decisions would have been made with the couple’s twilight years in mind – but should they separate, the wife can still make a claim to a share of that pension. That income could make a huge difference to someone facing later life on their own,” he said.
Not every silver separator will decide to remain single. The complexity of family relationships is such that if one or both partners remarry or co-habit it is advisable to ensure that family assets are properly protected. This is the time to think about and obtain advice for pre-marriage or cohabitation agreements.
“In the event of a separation, divorce or remarriage, it is sensible to revisit your will – or make one if you have neglected to do so.
“Collaborative family law is about helping people to work through the divorce process with minimal emotional and financial stress. Relationship breakdown in later life is sadly not unusual but with the right approach it need not be life limiting,” he concluded.Last modified: June 10, 2021