Senior Associate Solicitor, Andrew Ormrod, urges older couples to look beyond the family home and protect pensions, investments and future inheritance by explaining how couples can protect their future when separating later in life.
Senior Associate Solicitor, Andrew Ormrod, urges older couples to look beyond the family home and protect pensions, investments and future inheritance by explaining how couples can protect their future when separating later in life.
As the number of couples divorcing later in life continues to rise, family law experts are urging over-50s to seek specialist legal and financial advice before making decisions about their home, pensions and long-term assets.
Often referred to as ‘silver divorces’ or ‘grey divorce’, separation later in life can carry significant financial implications leaving many facing unexpected economic instability in their retirement years.
Splitting assets later in life presents unique challenges and raise a very different set of financial concerns from divorce earlier in life, Unlike younger couples, who have decades to rebuild their savings, those divorcing after 50 are not only more likely to have accumulated substantial assets including property, pensions, investments, savings, business interests and inheritance intended for children and grandchildren, but also have a much shorter time horizon to recover from the division of marital wealth.
Importantly, divorce itself does not automatically finalise financial claims. In England and Wales, a legally binding financial order, commonly a consent order where an agreement has been reached, is normally needed to properly record the financial settlement.
Andrew Ormrod, Senior Associate Solicitor at Slater and Gordon, said many people underestimate how divorce can affect their retirement plans and future financial security and to best navigate this complex change in circumstances, silver divorcees must understand their rights regarding assets when working out a fair financial settlement.
Andrew said: “Divorcing couples over 50 have often spent decades building a life together. It's not simply a question of deciding who keeps the house or who owns what on paper. For many couples, the biggest financial asset apart from the home is a pension, the value of which can be particularly significant when there may be only 10 or 15 years left before retirement. People can also make the mistake of thinking that because an asset is in one person’s name, it automatically belongs to them, but it may still be considered as part of the matrimonial pot. The outcome depends on the individual circumstances, the needs of both parties, the length of the marriage, income, earning capacity, contributions and the overall financial picture, so court will look at the overall financial picture,
“Seeking legal and independent financial advice at an early stage can help individuals understand their rights, make informed decisions and protect what they have worked hard to build over a lifetime.”
Frequently asked questions
Who gets the family home?
For many couples divorcing in later life, the family home is often their largest asset and their emotional security.
There is no automatic rule that one person keeps the property simply because their name appears on the title deeds or because they contributed more financially. Instead, the court will consider a range of factors including the length of the marriage, both parties' financial resources, housing needs, age, health and future earning capacity.
The property may be sold, one party may buy out the other, or transfer ownership with one person remaining in the home while the other receives their share at a later date, or receives a larger share of other assets instead.
However, keeping the house is not necessarily the best financial decision.
Andrew said: “People understandably want to protect the home they have spent decades building. But I would encourage anyone divorcing over 50 to look at the house alongside their pension and other assets, rather than in isolation.
“Keeping a £500,000 house may sound like the obvious objective, but if doing so means giving up a substantial pension or being left without enough income to fund retirement, it may not be the strongest long-term solution.
“The practical question is not simply ‘Can I keep my home?’, but ‘Can I afford to keep it and still have a financially secure future?’”
What happens to pensions?
Pensions are frequently overlooked but can be one of the most valuable assets accumulated during a marriage, often worth as much as, or more than, the family home, and can significantly influence financial settlements. Pensions can be shared between spouses or balanced against other assets as part of a financial settlement.
Pension values can also be more complicated than they initially appear. A pension worth £500,000 is not necessarily financially equivalent to £500,000 of cash or property, particularly when factors such as access, tax and the type of pension are considered.
Andrew said: “People approaching retirement often focus on the family home, but pensions can be worth as much as, or sometimes considerably more than, the property itself. Obtaining a full valuation of pension assets is an important part of reaching a fair settlement. It is essential not to make decisions about pensions based purely on the headline figure. In some cases, specialist pension advice or a pensions-on-divorce expert may be appropriate. A family lawyer can help identify when that additional expertise is needed.”
What about money or property inherited from parents?
Inheritance can be particularly sensitive where a person has inherited a property, money or investments during the marriage, or expects to receive an inheritance in the future. There is no simple rule that an inherited asset is automatically protected from a divorce settlement.
Andrew said: “Anyone who has built up assets with the intention of passing them to their children should take advice rather than assume those assets are ring-fenced. That might mean looking at the ownership of property, wills and estate planning alongside the divorce settlement. The objective should be to reach a fair financial settlement while also considering what happens to the remaining assets after death.”
Are children entitled to an inheritance?
One of the biggest concerns among divorcing parents is preserving an inheritance for their children.
While the court's priority is ensuring a fair financial outcome between spouses, there are steps individuals can take to protect family wealth as part of a wider financial planning strategy. This may include updating wills, reviewing trusts, revisiting pension beneficiary nominations and obtaining specialist succession planning advice.
Andrew said: “Many separating couples want reassurance that their children will ultimately benefit from the assets they have spent years accumulating. Taking professional advice can help ensure estate planning arrangements remain aligned with those wishes following a divorce.”
Should I give up assets to achieve a 'clean break'
A clean break can be an attractive goal, particularly for couples who want to move on with separate lives. But it is important to understand the long-term consequences before agreeing to a settlement.
Someone may be tempted to keep the family home in exchange for relinquishing a claim against their spouse's pension, for example. That decision needs careful consideration of retirement income, mortgage costs, maintenance, tax and future housing needs.
Andrew said: “Divorcing at 55 is very different from divorcing at 35. You may have fewer working years remaining, and decisions that look perfectly manageable today can have a major impact on your retirement in 10 or 20 years.
“Before signing anything, I would urge people to understand exactly what they are giving up, what they will have left and whether that will meet their needs in the future.”
What practical steps can I take to protect my finances?
It is recommended that anyone considering divorce later in life should:
- Gather information on all assets, including property, pensions, savings and investments.
- Obtain accurate property and pension valuations.
- Review existing wills and estate planning arrangements.
- Seek independent financial advice alongside legal advice.
- Consider mediation where appropriate to help resolve disputes constructively.
- Avoid transferring or disposing of assets without professional guidance.
- Ensure any financial agreement is properly documented and legally binding.
Where can people get help?
People do not necessarily need to instruct a solicitor for every stage of a divorce but professional guidance throughout the process will help make the process easier.
Navigating a silver divorce requires a multi-disciplinary approach combining legal assistance, financial planning, mediation and emotional support. However, a financial settlement involving significant property, pensions, investments, inheritance or complicated financial arrangements warrants professional advice.
Andrew said: “Getting early advice is about understanding your position and making informed decisions. A solicitor, mediator and financial adviser can each play a different role.
“The most important thing is not to make an irreversible financial decision simply because you are anxious to get the divorce over with.”
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]