Divorced people planning to retire this year could see their expected retirement income cut by £2,100 a year, new research has found.
Prudential’s annual “Class of” survey tracks the future plans and aspirations of people planning to retire in the next 12 months. Its Class of 2015 research, published on 16 April, found that for divorcees – 35 per cent of the total – the average expected retirement income was £15,700 compared with £17,800 for those who have never been through a marriage breakup.
One in five (19 per cent) of divorced retirees expected to live in retirement with an income below the Joseph Rowntree Foundation minimum income standard for a single pensioner of £9,500, compared with 14 per cent for those who had never divorced.
Clare Moffat, pensions specialist at Prudential, said: “Although the emotional impact of divorce may have long passed, it could come as a shock for people to find that it continues to impact them financially into their retirement.
“A pension fund is likely to be one of the largest and most complicated assets a couple will have to split in the event of a divorce. The support of a professional financial adviser or retirement specialist should help ensure that any financial decisions taken have the least possible impact on incomes available later in life.
“Professional advice is particularly important in the face of the recent changes to pensions legislation and divorced retirees acting on advice received under the previous rules may want to consider seeking updated advice on any post-retirement plans they have made.”