Women’s household incomes fall by 50 per cent on average in the year following a divorce, compared with a 30 per cent decrease for men, according to new research.
Almost one in five women post-divorce struggle to afford essentials such as food, double the proportion of men, according to the Legal & General survey, highlighting what the insurer calls a “divorce gap” that can persist into retirement.
L&G’s measure of household income included spousal maintenance payments or alimony, but it said most of its survey respondents would not have been in receipt of such payments.
Women’s financial challenges following divorce, when partners typically finance separate households, are partly structural. The L&G research found that 51 per cent of divorces involve women who were financially reliant on their husbands during their marriage. In 24 per cent of cases, women were the main breadwinner.
Even where the division of assets includes the family home — particularly where children are involved — this does not guarantee financial security, particularly as pension pots are often not included in the settlement, which can mean women experience a longer-lasting drop in living standards.
Ben Glassman, financial planning head of family and divorce at wealth manager Evelyn Partners, said couples splitting assets without lawyers are more likely to fall into this trap. “They may say ‘the house is worth the same as the pension, I’ll keep the house, you keep the pension’ . . . that’s certainly not going to be equitable from an income perspective.”
After separation, one in five women return to paid employment — but barriers to earnings potential and career progression remain, said Lorna Shah, managing director of retail retirement at L&G. “Women are still far more likely to pick up the majority of childcare and broader caring responsibilities,” she added.
L&G research found women are twice as likely as men to reduce working hours after divorce to care for children, and are more than twice as likely to report difficulties juggling work and childcare.
Annie Clarke, a 60-year-old book-keeper, told the FT that during her marriage her ex-husband had been the main breadwinner while she fitted her own work commitments around caring for their three children.
After her divorce in 2007, she “was permanently exhausted” from single parenting and working at night and “called in favours with friends” to help with her reduced budget. She admitted that her solicitor encouraged her to “push harder”. “If you’re worrying about your finances and not being able to provide your children with a decent dinner, that makes everything 100 times worse,” said Clarke.
The L&G findings add to previous research that show women — and particularly mothers — find themselves in more precarious financial positions at the point of divorce than men.
A major 2023 study into financial and property division after divorce in England and Wales, led by Bristol university, revealed wives were more likely to earn less than husbands during the marriage, with 28 per cent of divorcee respondents to its survey having take-home pay of less than £1,000 per month, compared with 10 per cent of men.
The result is a compounding disadvantage for women over time. Although women were as likely as men to have a pension, men were more likely to have paid into it for longer. Data from L&G’s own book in 2024 revealed the gender pension gap is 21 per cent at the beginning of women’s careers, showing very little change from 2022. Women’s pensions at the point of retirement are half the size of those of men.
Pensions are among the biggest financial assets held by individuals. Yet only 13 per cent of divorcing couples consider pensions in financial settlements, according to L&G — far fewer than the half of couples who consider the value of their family home. Nearly a third, or 28 per cent of women, waive any claim to a partner’s pension, compared with 17 per cent of men.
“It’s easy to make these decisions in a rush,” said Shah, adding that a financial adviser can “take the emotion out” of a difficult settlement process and ensure that both the true value and the potential future value of assets such as pensions are factored in.
Glassman advises bringing in an actuary to ensure pension assets are not undervalued at the point of divorce.
“One party might have a £100,000 invested in a Sipp {self-invested personal pension] and the other has an NHS pension worth £100,000, but the NHS pension is going to be far more valuable in an income perspective than the Sipp,” he says.
Completed divorces, where a “final order” is granted by the courts, took an average of 70 weeks in October to December 2024, up two weeks from the same period a year ago.
