A survey carried out by a leading pension firm has revealed the shocking number of women who face financial uncertainty after divorce.
Phoenix Life and Pensions Ltd found that hundreds of thousands of women do not receive the right legal advice following their marriage breakdown leading them to settle for less than they may be entitled to in their financial settlement. The figures make for uncomfortable reading. 40% of divorcees are unaware of the exact details of their financial settlement. 33% are left without the capacity to save further, and 66% believe that they will be left with no income other than the state pension.
Most alarmingly, a quarter of all female divorcees who participated in the study had opted for ‘do-it-yourself’ divorces, therefore receiving no professional legal or financial advice prior to deciding their financial future. Doing so carries various risks. Even in agreeable separations, there can be no guarantees that the relations will remain cordial, especially as the respective parties take on new responsibilities in terms of partners or children. Voluntary arrangements can be broken leading one partner facing serious financial hardship and a major problem for women is husbands reneging on informal maintenance arrangements.
DIY divorces can also be problematic in terms of mortgages and pensions. The respective mortgage lenders and pensions companies must be informed about plans to settle post-separation and will often be uncomfortable with such uncertain arrangements.
It is rare that anybody emerges from a divorce better off due to the difficulties of forging two financial futures out of a shared pot. Nevertheless, women can make sure that they avoid certain pitfalls during marriage.
Allowing the vast majority of savings or assets to be in one partner’s name is a common mistake. Ensuring that you have assets in your name can protect your financial interests upon separation. Furthermore, women should be aware of their rights to their husband’s pension and be sure not to cease paying into their own funds or savings accounts.
Given the various complications associated with the financial aspects of divorce, we always advise that both parties seek expert legal advice from a specialist divorce solicitor. This can help to simply the process and ensure that both parties reach a fair outcome. Where divorces are settled informally it is crucial that a Consent Order is obtained from Court which makes any decisions regarding the division of assets or maintenance payments legally binding.
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