Over fifties finding their financial feet post divorce
Rising divorce rates amongst the over 50s England and Wales more than 50,000 over-50s got divorced a rise of 10% compared with 1999 (ONS, 2009) mean an increasing number of middle aged women and men are having to take financial control for possibly the first time in twenty years - or in some cases their lives - according to new research from Tesco Bank.
The research shows that gaining financial independence is a major challenge.
The traumatic decision to get divorced means having to set up a new home, opening a bank and saving accounts, take out new insurance policies and think about longer term financial planning and investments - often for the very first time.
Women are far less likely to have been involved in any long-term financial planning with less than a third (26%) saying they took responsibility for managing the 'bigger' financial decisions whilst married. Prior to divorce, a quarter (25%) of all these over 50-something women admit that they had never considered savings options, a third (34%) had never applied for a mortgage and one in 10 had no financial products or accounts in their name.
The report entitled "Footloose and 53? A study of financial management and priorities amongst over 50s divorcees", was commissioned by Tesco Bank to explore the financial pressures faced by over 50s when going through a divorce. It is the second in the Tesco Bank "Family Matters" series Family Matters Series: Every Little Helpers
July 2010 and provides new insights into the financial priorities and pressures of divorced men and women in this age group.
Sue Hayward, Journalist in money, consumer and family finance issues said 'There's usually one partner who holds the purse strings in a relationship and it can be daunting if you're left financially single when you separate but the trick is to sort your finances in bite sized chunks; tackle one area at a time and make use of all the help that's available'.
Gaining financial control can ultimately be an empowering experience, particularly for women, according to the findings. Almost two thirds (63%) of women who divorced in their fifties said that dealing with financial arrangements helped them to gain a sense of power and control during the painful process, but just a third (36%) of men agreed. Similarly, two thirds (64%) of women said going through a divorce gave them a sense of financial freedom, compared with just half (50%) of men.
Paula Hall, Counsellor with Relate and Author of "How to Have a Healthy Divorce", added: "Divorce ends around 40 per cent of marriages in Britain and is an experience that can temporarily leave individuals and families feeling devastated. Fortunately, it is possible to break up, without breaking down.
"There are many practical and financial pressures that the newly single have to face and when emotions are running high these can feel especially difficult to manage. For many the task of organising and planning their finances gives a sense of external order and control."
George Gordon, Head of Communications, Tesco Bank, said: "We commissioned the Tesco Bank "Family Matters" series of research to get a better understanding of some of the financial pressures faced by our customers.
The second report in our series sheds light on a growing trend of later life separation and the financial pressures this can create for the over-50s; particularly those who have had limited financial independence in the past.
"What is clear from this research is that whilst divorce is clearly a difficult and traumatic experience at any age, for the over fifties, overcoming the financial challenges it presents can ultimately help restore confidence and independence."
Helpful tips from Tesco Bank to help you find your financial feet:
Understand your financial position - start by gathering information and looking through past statements, this will make you feel more in control
Create a budget - make a list of your bills and other outgoings to establish a budget that you can keep to
Prioritise financial commitments - this will often require emotional ties to be set aside and practical decisions to be made
Check your credit report - if you have always borrowed money in joint names or your partner's name you may need to build up a new credit rating
Check your life insurance - if you are the sole carer of a child, you should check if you now have adequate life insurance cover
Check the rate on all your financial products, particularly savings - once you start to think about longer-term priorities it is important to make sure you are getting the best deal, particularly with a view to saving for retirement
Check and consider any private health care - if you have lost benefits offered through your partner's work such as health care, think about whether you want to replace this cover England and Wales more than 50,000 over-50s got divorced a rise of 10% compared with 1999 (ONS, 2009)