Divorce ‘costs £2,600 per year in expected retirement income’, according to Prudential survey
Divorced retirees expect a £13,800 annual retirement income, compared with £16,400 for those who have not
Divorce reduces average expected retirement income by around £2,600 a year (16 per cent), according to a survey conducted by Prudential. People who are planning to retire in 2013 and have been divorced expect to retire with an annual income of £13,800 compared with £16,400 for those who have not divorced.
Prudential's Class of 2013 survey, based on a poll of 1,007 people intending to retire in 2013, shows that 40 per cent of those planning to retire in 2013 have been divorced, and in general they are less likely to have private pensions, more likely to retire with debts, and less likely to believe they are financially well prepared for retirement. They are also less likely to expect to be able to leave an inheritance.
Eighteen per cent of previously divorced 2013 retirees have no private pension savings compared with 14 per cent of those who have never been divorced. Prudential also found that 22 per cent of those who have been divorced are retiring with debts, compared with 16 per cent who have not been divorced, while just 45 per cent expect to leave an inheritance compared with 52 per cent who have not been divorced.
Only one in three (33 per cent) of those who have been divorced believe they have saved enough for a comfortable retirement, while 42 per cent of those who have divorced say they are financially well-prepared for retirement.
Clare Moffat, pensions specialist at Prudential, said:
"Women's retirement incomes are particularly vulnerable to the financial effects of divorce. Many of them may be relying on their husband's pension and in some couples the wife may have had little input to the financial decisions that have been made over the years."