For those over 55, divorce is not just a financial challenge but also an emotional and social shift. Specialist Family Solicitor Norman Hartnell shares his thoughts.
Many individuals at this stage are empty nesters, approaching retirement or are looking at how they can help their adult children financially perhaps by getting on the housing ladder. Their health and opportunities for enjoying life are at its peak so when divorce occurs it can feel like the end of their financial security and flexibility. Divorce can bring a sense of loss but also an opportunity for self-discovery and renewal.
How to split finances – does 50/50 always apply?
The division of assets is often one of the most contentious aspects of a divorce. Information about the individual and joint finances, from the family home to pensions, must be disclosed to one another and to the Court, and decision as to distribution can be discussed and agreed. Where agreement is not possible, an application to the Court for financial proceedings may instead be necessary.
In reaching a settlement outcome, specific relevant factors – including the needs of the individual parties and any children of the family – will be considered, so that whilst assets acquired during the marriage may typically be split 50/50, a departure from equity in the favour of one party may be appropriate. Other factors such as the contributions of each party, the ages and earning potential of each party, and their ability to rehouse themselves, are also relevant, so that the allocation and eventual settlement may not necessarily be equal but should be based on what is considered fair.
One aspect which often causes confusion arises where one person has contributed far more than the other, how does the court take that into account? The answer depends on whether the needs of both people can be met from the assets which have accrued during their relationship (called “matrimonial assets”) which will include the family home, and whether either of them have kept separate assets which they may have had prior to the relationship. “Needs” predominates in all cases, and such needs can take into account earning capacity, health and a variety of other factors listed for the judge to consider.
The “fair”distribution of the assets can be affected in a variety of ways, such as via lump sum provision, transfers of property, pension-sharing, spousal maintenance or off-setting of assets.
Pensions are a significant consideration in divorce settlements, especially for those over 50
Defined benefit pensions (which provide typically a proportion of salary pensions) are more common in this age group and are often more valuable than defined contribution pensions, especially public sector pensions. Pensions are often the largest or second-largest asset with the family home, making it essential to consider how they should be shared to provide financial security for both in any financial settlement.
Should pensions earned prior to the relationship be split? The answer comes back to the “needs” question, there is no single guideline, each case will be looked at individually. Unless pensions are small, their value typically totalling less than £100,000, it is likely that it will be necessary to obtain advice on their values and how they can be split from an actuary typically costing £3000 or so. The actuary will advises how the pensions should be divided to achieve equality of income upon retirement – accounting for anticipated retirement ages.
Properly valuing and dividing pensions is part of the task of ensuring a fair outcome to secure financial security for both parties in the future.
Divorce and Finance law when you are over 55 – how to keep costs under control?
Divorce can be costly, but there are ways to manage expenses:
- Do your research! Find out about the various legal processes such as mediation and collaborative law and find a solicitor who is committed to a problem solving approach. These approaches foster clearer communication and aim to resolve disputes without court proceedings, reducing both costs and emotional strain.
- Engaging a financial adviser can help clarify your financial position and plan for the future. For example, advisers can project retirement income based on different settlement scenarios.
- Work with a law firm that prioritises efficiency and transparency. There are some aspects that a divorcing couple may be able to attend to themselves but accept that there are aspects where legal advice is essential like the financial order, to “look after your tomorrow self”. A solicitor can ensure any agreement is drafted correctly into a Consent Order and filed with the Court to be legally binding so that neither spouse remains financially at risk in the future.
- Always ask your solicitor to let you have monthly bills and breakdown of the time they have to spend on your matter. Ask them for estimates of what the case is likely to cost when this is predictable and when there is any change. If you have queries about any of their bills, raise those queries straight away, it’s ok to do so, then move on.
- Above all aim to understand and remain in control, good solicitors will explain their advice, so that ultimately it is you who are making the decisions, because you understand what’s involved.
Divorce and Finance law when you are over 55 can be complex, but with the right information and professional support, it’s entirely manageable. The key is to approach it proactively, seek expert advice when necessary, and remain informed so that the decisions you make today protect your financial security and enable you to confidently embrace your future. Remember, divorce isn’t just an ending—it can also be the start of an empowering new chapter.
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