Shocking Statistics Revealed: Only 7% Seek Financial Advice During Divorce

Legal & General’s latest research has revealed concerning trends in divorce, particularly in relation to financial matters. The study, conducted to coincide with Divorce Day on 2nd January, has uncovered that just 7% of individuals seek the guidance of a financial adviser when navigating the complexities of divorce.

One of the most striking findings is that a significant number of people (13%) have postponed their divorce due to the financial strain of the cost of living. This delay has been especially common among recent divorces, with 19% citing financial reasons for putting off the separation. The impact of this financial delay is evident in the fact that almost half of divorcees (48%) experience a substantial decrease in income, amounting to an average reduction of 31% in the year following the divorce, equating to a difference of approximately £9,700 each year.

The financial imbalance in divorce settlements is a prevalent issue, with 40% of individuals feeling that the division of assets was unfair. Despite this, the majority of people do not seek professional financial counsel, and only 31% of divorcees have signed Clean Break Orders, leaving more than two-thirds vulnerable to potential future claims from their ex-spouse.

According to Paula Llewellyn, the Retail managing director at Legal & General, there is a pressing need for more divorcing couples to engage with financial advisers to ensure a fair and equitable distribution of assets. She highlights the importance of establishing a clean break from financial obligations to one another, underscoring the significance of seeking professional advice.

The research also brings to light the substantial impact of divorce on retirement planning, particularly for individuals over the age of 50. Legal & General’s findings reveal that these individuals are saving £63 less each month towards their retirement, culminating in a nationwide reduction in retirement savings for 200,000 people.

Furthermore, the study exposes a concerning lack of consideration for pensions when dividing assets, with only 20% of divorcing couples factoring in pensions, and 29% actively waiving their rights to their value. Llewellyn emphasises the importance of addressing pension assets during divorce proceedings, particularly in cases where one party has been the primary earner and accumulated a significant pension, while the other party, often due to taking on greater family caring responsibilities, has not.

Legal & General’s research offers a sobering insight into the financial implications of divorce and provides a compelling case for the crucial role of financial advisers in navigating these complexities. The findings underscore the need for increased awareness and engagement with professional financial guidance to ensure fair and equitable outcomes for all parties involved.