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Published: 21/05/2021

At a glance

  • Getting divorced in retirement will require a careful division of assets that have been built up over a lifetime.
  • The family home, pensions, investments and the finances will all need to be considered and divided fairly.
  • Seeking financial and legal advice is essential. 


Article written by Kellands Hale our preferred independent advice firm.

This article is not intended to be financial advice to any individual. The views expressed are those of the author and does not endorse the content.

Divorce can be a harrowing experience at any age, but it arguably becomes even more difficult during retirement, as finances are likely more entwined than those who get divorced at a younger age – which means it could have a huge impact on both your immediate and long-term financial plans, with a lifetime of assets having to be divided. This means it’s vital to go through everything carefully to ensure the best outcome for both parties, so here are a few things you may need to consider when getting divorced in retirement.

What will happen to my assets if I divorce in retirement?

It probably goes without saying, but getting divorced in retirement will mean that the family assets have to be divided. While this process is necessary during any divorce, the value of those assets could be a lot more substantial among those in retirement – particularly when it comes to pension pots and family homes – while generational differences could mean some retirees in particular have little in the way of personal wealth if they weren’t working. It’s therefore important to facilitate an equitable division as far as possible, and is why seeking both financial advice  and legal support is essential, even if the divorce is amicable. 

Will divorcing mean I need to share my pension?

In all likelihood, yes, pensions will need to be shared in a divorce. There are various methods in which this can be achieved, from a simple split (known as “pension sharing”) to “earmarking” funds to be divided at a later date, if applicable. However, there’s also the option of “offsetting”, whereby one party keeps the pension in return for the other keeping an asset of equal value, such as the home. Yet given the often high value of pension pots and the complexity of pensions in general, it’s often worth consulting the professionals to determine the best course of action, particularly where final salary schemes are involved, which can add another layer of complexity into the mix. You can find out more about pension options in a divorce by reading our guide. 

Will I lose my home if I get divorced?

The family home will probably be the biggest concern for anyone getting divorced, as one or both parties involved will usually have to leave it. Yet this in itself could prove difficult for those in retirement – mortgage borrowing is a lot more restricted to those in later life, which means if one party hopes to buy out the other and needs a mortgage to do so, they’ll face particularly tough affordability criteria. The other option could be to sell the home and buy two separate properties, ideally outright in order to avoid the need for mortgage borrowing altogether. 
Yet for those looking to unlock the equity in the marital home without selling or taking out a traditional mortgage, equity release could be a solution. 


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Can equity release help during a divorce?

Equity release could be a viable option if one party is looking to stay in the home and wants to buy out the former spouse, and/or wants to boost their income during retirement, perhaps after pension offsetting has awarded them the family home. By taking out a lifetime mortgage, there’s less concern about affordability as repayments aren’t usually required until the property is sold (unless you choose to make them), which can make it a far more suitable borrowing option for those who have left the workplace.  

Find out how much money you could release from your home

Go to the equity release calculator provided by HUB Financial Solutions and see how much money you could release from your home.

How can I untangle joint finances?

There are probably a lot of other joint finances that will need to be untangled during a divorce as well, perhaps joint bank accounts and/or savings accounts, as well as credit accounts and household bills. It’s important to contact the relevant companies to make them aware of the situation and start the process of untangling – either by removing one party from each account, or cancelling everything and starting afresh – and you’ll need to make sure that all bills continue to be paid on time less one or both of your credit scores are affected (this applies to the mortgage as well). 
You may also want to make sure that your ex-partner can’t take any savings from joint accounts, or run up more debt on joint credit cards while things are being disentangled. In this case, you’ll want to consider freezing any joint accounts, or even applying for an injunction so your ex can’t dispose of assets.  

What should I do about my will?

The will is always going to need rewriting in a divorce, but older divorcees will need to take an even closer look at all relevant financial agreements, such as life insurance policies that may have been taken out decades ago, and pensions that may have been forgotten about, to change the beneficiary accordingly. 

Where can I find suitable financial advice? 

Divorcing in retirement is certainly never going to be straightforward. Aside from the usual financial wrangling, both parties will have to deal with the potential consequences of being a single person with half the assets, which may not offer as comfortable a lifestyle as their previous arrangement, particularly if they’ve left the workplace and have limited ability to earn more to boost the coffers. This is why seeking suitable advice is paramount in this situation, and is where independent financial advisers and legal experts come in. 


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Important information from Kellands Hale

This guide should not be read in isolation, it is provided for information only purposes and should be considered in conjunction with other relevant information which is available, including that which is held within the public domain.  Any views or opinions expressed within this material are provided in good faith and based upon our understanding of UK law, regulation and the financial services market place at this time which is subject to change without notice.
The content should not be viewed as personal financial advice, but instead is intended to provide an overview of possible considerations or options.  Formal personal financial recommendations will be made in writing to you once the decision has been taken by you to formally appoint Kellands as your advisers.
If you have any doubts as to whether the content of this material meets your needs you should seek personal financial advice, which can be offered by us at your request.  Kellands reserve the right to charge additional fees for financial advice services.  The fees payable will be agreed with you in advance before we commence work on your behalf.
Whilst we take responsibility to ensure that the information contained within this guide is accurate and up to date, we do not accept any liability for any errors or omissions.  If you are in any doubt as to the validity of information made available, we recommend you seek verification by contacting us in the first instance.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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At a glance

  • Getting divorced in retirement will require a careful division of assets that have been built up over a lifetime.
  • The family home, pensions, investments and the finances will all need to be considered and divided fairly.
  • Seeking financial and legal advice is essential. 


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