Grey divorce is on the rise: Unique financial challenges of divorcing after 50

Divorce is a challenging life event that could affect people of all ages and backgrounds.

Yet, as a solicitor, you might have noticed a change in the type of clients coming to you for advice on separating in recent years.

A report by Legal & General (1 October 2024) revealed that in 2021 (the most recent data available), 1 in 4 divorces took place between couples aged 50 and over.

Moreover, the most recent data from the Office for National Statistics (ONS; 28 May 2024) shows that the number of men filing for divorce at 65 and over went up by 23% between 2005 and 2015, and by 38% for women in the same age bracket.

This rise in “grey divorces” may be due to several reasons, such as:

• Changing societal attitudes
• Longer life spans
• Greater financial independence for women.

Whatever the cause, divorcing over 50 could present unique financial challenges. Keep reading to learn how your clients’ wealth might be affected if they choose to separate later in life, and find out how a financial expert could help.

Dividing accumulated assets could be complex

If your clients are separating after many years of marriage or civil partnership, sharing their assets could be more challenging than for younger couples or those who have been together for a short time.

Your clients’ finances may be deeply entwined with those of their spouse or partner. As such, it’s likely that they may need to share any or all of the following when they divorce:

• A home, and possibly additional properties
• Valuable belongings, like cars and artwork
• Protection policies, such as life insurance
• Business assets
• Savings accounts
• Investments
• Pensions

Agreeing on how to divide such an extensive array of assets could be complicated and time-consuming.

Additionally, if your clients got married or entered a civil partnership later in life – after they had accumulated independent wealth – there may be some disagreement about which assets should be included in a financial settlement during divorce.

Read more: How working with a financial expert could help your high net worth clients navigate divorce

Older clients may have limited time to rebuild their financial security after divorce

Legal & General (6 January 2025) recently reported that almost half (45%) of all divorcees see their incomes shrink by an average of 30% in the year following divorce. The cost of divorce alone typically costs £2,500, and this figure could be significantly higher in complex cases where court appearances are necessary.

Older clients who are close to (or already in) retirement, may find it harder to bounce back financially from a divorce than younger individuals who have many working years ahead of them (which could help them recoup their losses).

Indeed, for those who are retired and reliant on a finite pot of funds (such as pensions and other savings or investments), spending thousands on legal fees could significantly reduce their wealth and standard of living – both immediately after divorce and in later life.

This might be a particular risk for women, due to gender pay, pensions, and investing gaps.

Read more: Why divorce can play a major part in exacerbating pension inequality in the UK  

Splitting pension wealth may be more complex if one or both parties have begun accessing their benefits

Pensions are often one of the most valuable assets in a divorce, so it’s essential that your clients include them in their financial settlement. Failing to do so could jeopardise their future financial security and wellbeing.

Yet unfortunately, pension sharing often becomes more complicated if one or both parties are already accessing their pensions at the time of divorce. Logically, this is increasingly likely the older a couple is when they choose to part ways.

Some of the key factors that may contribute to this complexity include:

• Limited options for withdrawing tax-free cash – If the pension holder has already taken a tax-free lump sum from their pot, there may be limited or no options for the ex-spouse to do so when they receive their share.
• Pensions that have been accessed are harder to value – A clear valuation is necessary to ensure that pensions are shared fairly between the separating spouses or partners. An actuary will likely be needed to value a fund that involves ongoing income streams rather than a straightforward valuation of an untouched fund.
• Partial transfers of crystallised pensions are not allowed – Once a person has accessed their pension, it’s not possible to transfer part of it; only transfers of the full amount are allowed. This could also limit tax-free cash options.
• Both parties may see their pension income fall – Splitting a pension on divorce could mean that a retiree who is already drawing on their pension has their payments reduced. Likewise, if your client is awarded pension credits as part of their financial settlement, they may receive less than expected due to transfer fees, and various tax implications (pension credits are usually treated as taxable income).

A financial expert can provide valuable support to clients who experience divorce over 50

As you can see, grey divorces may present your clients with unique financial challenges.

An experienced professional could help them navigate these potential problems and protect their financial security in both the short- and long-term.

As a specialist in divorce, I can help your clients:

• Gain clarity on their current financial situation
• Make informed decisions about their settlement
• Capitalise on their existing wealth
• Plan for their future after divorce.

If you or your clients are experiencing divorce later in life, please get in touch to find out how I can help.

Contact me at lottie@truefinancialdesign.co.uk or call 03300889138.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.  

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.