Whilst the divorce rate in the UK is the lowest it has been for nearly 40 years, there is one section of the community which is bucking this trend. The number of divorces amongst the over 60s has almost doubled in the last decade with divorces granted to nearly 9,500 men aged 60 and over, and 5,800 women in the same age group in 2011 (the last year for which figures are available, Office of National Statistics). There are almost as many reasons for this as there are divorces but for some it may seem that a complicated divorce with child maintenance issues has been avoided and a divorce now can be a clean and simple break. Certainly waiting until the children have left the family home limits the impact on them and avoids many of the issues about future provision for their care. However sorting out the financial arrangements for people married for many years can often be a more complex process than for younger couples. It will require careful and sensitive negotiation to ensure that both parties are treated fairly and provided for in the future.
Pensions are the obvious starting place, with pension funds an important and valuable asset particularly in longer marriages. In some cases, it may be that a pension is already being received. Decisions will need to be taken about how this is shared to provide for the future. Pension sharing orders are increasingly common in divorce proceedings and will provide future financial security for a party who has not been able to build a pension pot for themselves. Pension scheme administrators will only share a pension asset if there is a court order made within the divorce process to provide for it. Decisions may also have to be made as to whether a maintenance agreement is required prior to the pension becoming payable.
Wives or husbands who have not worked throughout the marriage and have not obtained a full National Insurance contribution record may benefit from their spouse’s contribution record, thus acquiring a full state pension at retirement age, provided that their divorce is finalised before April 2016. New state pension rules are then set to be introduced and this arrangement is likely to disappear.
It is likely there will be other significant assets in the form of the family home and savings. Dividing these may be relatively straightforward but safeguarding some of these assets for the couple’s children may be desirable and should certainly be a subject for discussion and negotiation. This will be particularly important if either or both parties marry again at a later stage.
Wills and any arrangements set up under those Wills will need to be reviewed. Any existing provision in favour of the other spouse and any appointment of the spouse as an executor will be nullified by the parties’ divorce. Wills should be reviewed on a regular basis to ensure they reflect changes in circumstances such as the arrival of grandchildren and legal and regulatory developments.