Divorcees lose £2k a year in retirement income

16 April 2015

Divorcees planning to retire this year expect to get £2,100 less in retirement income compared to those who have never suffered a marriage breakdown.

Annual expected retirement income is £15,700 among those who have divorced, compared with £17,800 among those who've never been divorced, research from Prudential has found.

Former spouses set to retire this year will also do so with more debt than those who are married, or who never married.

One in five divorcees will retire with outstanding debts of £22,100 on average, compared with £21,700 for non-divorcees.

Individuals who have been divorced are also more likely to delay the start of their retirement than everyone else (13% compared with 11%) and more of them expect to live in retirement with an income below the amount the Joseph Rowntree Foundation deems a minimum income standard for a single pensioner, which is £9,500 (19% compared with 14%).

Mounting costs

Clare Moffat, pensions specialist at Prudential, said: "During a divorce the costs can quickly mount up, with legal fees, the cost of setting up a new home and the effect of splitting any existing retirement savings all potentially impacting the ability of those involved to continue saving into a pension.

"Unfortunately divorce is most likely among those aged 40-44, the period in many people's lives when earning potential peaks and the most valuable pension contributions can be made."

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