Wives pay the price of divorce
Wives pay the price of divorce
It is a common concern that on divorce wives fare worse financially than husbands. The main argument goes that even today in most marriages husbands are the ‘primary’ breadwinner, and that as a result wives have, on average, lower incomes and fewer capital assets than husbands, and the divorce process does not ‘even up’ this disparity.
Others argue that wives actually do better financially from divorce than husbands, claiming that the courts tend to favour them when dividing assets.
These arguments will no doubt continue as long as couples get divorced. However, some recent research carried out on behalf of the pension provider Legal & General Retail Retirement appears to support the argument that wives do indeed fare worse financially than husbands.
The research was carried out by the research agency Opinium Research, which ran a series of online interviews among a nationally representative panel of 2,008 UK adults aged 50 plus, who were divorced from the 19th to the 23rd of September 2020.
Drop in income
The first finding of the research was that wives are likely to see their household incomes fall by a third in the year following their divorce, almost twice as much as husbands (33% wives against 18% husbands).
Legal & General say that: “There are many reasons driving this disparity, one being that women are typically paid less, whilst men who divorce are far more likely to have been the primary breadwinner in the relationship (74% men vs. 18%). This is why women will likely feel a greater degree of financial burden if transitioning to a single-income household.”
But it needn’t be this way. After all, the law does not favour husbands over wives. Further, as the courts have made clear, marriage is a partnership of equals – meaning that spouses can each contribute in different ways. Thus, for example, the financial contribution of a breadwinner is not valued more highly than the contribution of a spouse who looks after the home and brings up the family.
And the main purpose of the law is to ensure fairness when it comes to sorting out financial arrangements following divorce. This means, in broad terms, that the parties should be put in a similar financial position to one another after the divorce, unless there is a good reason why this should not happen.
Moving on, the research also found that, whilst there was only a slight difference in the number of husbands and wives who feel that the division of their finances at the point of divorce was fair and equitable (54% husbands and 49% wives), many women may be signing over their rights to a key financial asset. In particular, wives are significantly more likely to waive their rights to a husband’s pension as part of their divorce (28% wives vs 19% husbands).
Needless to say, this can have a significant long-term impact, as Legal & General point out.
It is certainly true that pension rights are amongst the least well understood aspects of sorting out finances on divorce, and that husbands still usually have much higher pension provision than wives.
An easy trap to fall into is waiving rights to a share of the other party’s pension in return for other assets, which may ultimately prove far less valuable than the pension share.
What is the result of these disparities between husbands and wives?
Unsurprisingly, Legal & General say that wives are more likely to face financial struggles following a divorce from their partner (31% wives vs. 21%), and that this is particularly true for older women who divorce. They go on to point out that one in four divorces occur after the age of 50, and wives are significantly more likely to worry about the impact of their divorce on their retirement (16% wives against 10% husbands).
The importance of advice
So what is the answer? How do wives ensure that they are not worse off than their husbands after divorce, and do not have to struggle financially thereafter, all the way into retirement?
The answer is quite simple: take the best possible legal advice, at the earliest opportunity. We can provide the advice you need, including referring you to specialist financial advisers, if necessary.
To find out more, and to get started with one of our specialist lawyers, click here.