Later-life divorce: the underestimated risk to retirement plans
For many couples, the start of a new year brings a moment of reflection. Known as Divorce Day, the first working Monday of the year (5th January) typically sees a surge in divorce enquiries to solicitors across the UK. While divorce at any age can be emotionally and financially challenging, new research suggests that separating later in life can seriously impact retirement plans.
Our latest research has revealed that more than 200,000 people who divorce after the age of 50 (15%) are forced to delay their retirement due to the financial strain of separation*. For individuals who may have been approaching retirement with a clear sense of direction, divorce can fundamentally change the picture, turning what should be a period of planning into one of rebuilding.
A financial shock at the worst possible time
The research highlights just how disruptive later-life divorce can be. On average, people who divorced after 50 saw their annual income fall by £7,753 in the year following their divorce. This drop could be significant at a time when many expect earnings to be stable or winding down.
Rebuilding finances later in life is also more challenging. Nearly one in four (24%) say it is more difficult to rebuild savings because they are past their peak earning years. More starkly still, 13% of later-life divorcees, around 180,000 people, believe they will never financially recover.
Unlike younger divorcees, those separating later in life often have fewer working years ahead, they may be living with health considerations and have less flexibility to absorb financial shocks. This combination makes every decision, particularly around pensions, property and retirement income more consequential.
Retirement plans rewritten
Unsurprisingly, these pressures flow directly into retirement planning. Almost a quarter (23%) of people who divorce after 50 now expect to live on a lower income in retirement than they originally planned. Meanwhile, one third (32%) say they will need to downsize their home as a result of their divorce.
For many, the family home represents one of their most significant financial assets, and one of the most complex to navigate emotionally. Decisions around whether to sell, keep or release equity can impact long-term retirement outcomes. While downsizing is often seen as the default response, it isn’t always the most practical or desirable option. Your clients may understandably be reluctant to disrupt established support networks by moving house or lose the stability of the family home with all its memories.
In some cases, later-life lending options, such as lifetime mortgages or retirement interest-only mortgages, may form part of a broader financial planning conversation. These solutions can help some individuals manage housing needs following divorce, whether that means buying out a former partner, achieving a clean financial break, or maintaining stability through retirement. As with any major financial decision, careful consideration and professional advice are essential.
Pensions: the asset many overlook
Despite their importance, pensions are frequently overlooked during divorce settlements. The research found that only 25% of people who divorce after 50 include pensions in settlement discussions. At the same time, nearly a third (31%) waive rights to their partner’s pension, yet just 8% seek financial advice before doing so.
Given that pensions often underpin retirement income, whether through annuities, drawdown or a combination of both, these decisions can have lasting consequences. Without professional guidance, individuals risk making choices that significantly undermine their long-term financial security.
A wider impact on families and inheritance
The financial effects of later-life divorce extend beyond personal retirement plans. One in five (20%) say they may no longer be able to leave an inheritance, while 17% feel it may become harder to support adult children financially in the future. What begins as a personal life change can therefore have lasting implications across generations.
The value of expert support
Divorce is not simply a legal process; it is an emotional and often overwhelming life event. For clients separating in later life, the pressure to make long-term financial decisions, frequently under time constraints, can make it difficult to fully understand the implications for retirement income, housing and financial security.
This is where expert financial support can make a meaningful difference. Decisions involving pensions, annuities, property and later-life lending are deeply interconnected, and taking a holistic approach can help clients avoid unintended consequences that may otherwise affect their standard of living for years to come.
Having access to specialist expertise can help clients feel much more confident when navigating these complex conversations. Whether the challenge is assessing pension options, understanding the impact on retirement income, or exploring housing solutions following divorce, financial advice can help ensure decisions are grounded in a client’s long-term needs rather than short-term pressures.
While divorce inevitably brings both emotional and financial strain, the right support can help guide clients through this difficult transition with clarity and care, protecting retirement prospects and helping individuals move forward with greater confidence.
Speak to our expert team to find out more about how Annuities and Lifetime mortgages can help your clients experiencing a later-life divorce.
*Opinium Research conducted 2,750 online interviews of UK adults who are divorced, of which 471 divorced after age 49. The research was conducted between the 6th and 25th November 2025.