Starting again later in life: the financial considerations of divorce
When you’ve spent many years building a life together, separating can mean more than a change of address. It can also mean rethinking plans for the future, particularly when retirement is approaching or already under way.
It’s a subject that has been in the news recently. The Financial Times reported that around 27,000 heterosexual couples in England and Wales divorced in 2025 after being married for at least 20 years. The report highlighted the financial challenges that can follow a separation later in life, when there may be less time to rebuild savings and retirement provision.
Every situation is different, but if you’re facing a separation, understanding your financial position is an important part of deciding what comes next.
Look beyond the family home
When a relationship ends, the family home is often one of the first things people think about. But it’s important to look at the whole financial picture.
Pensions, savings, investments and other assets may all need to be considered as part of a financial settlement. Pensions in particular can be overlooked, even though they may be among the most valuable assets either person has.
This matters especially where one partner has built up more pension savings than the other. For example, one person may have spent time caring for children or managing the home, while the other continued working and contributing to a pension. Both contributions to family life are relevant when considering the financial position of each person.
Don’t overlook your pensions
Pensions can be dealt with in different ways as part of a divorce settlement. They don’t automatically have to be divided equally, and the right approach will depend on the circumstances.
One option is pension sharing, where an agreed proportion of one person’s pension is transferred to the other. Another is pension offsetting, where one person keeps their pension and the other receives a greater share of another asset, such as the family home or savings. There is also pension attachment, where a share of future pension payments is paid to an ex-partner.
These arrangements have different implications for each person’s future income and financial independence. A pension and a property, for example, aren’t necessarily equivalent simply because their current values look similar.
It’s important to understand what each pension could provide in retirement, not just its value on paper. Specialist advice may be helpful when pensions form a significant part of the settlement.
Revisit your plans for retirement
If you had planned to retire together, or expected to share household costs and income, separation may change what is affordable.
You may need to think again about when you can retire, how much income you’ll need and whether your pension and savings are likely to support your plans.
If you’re already retired, your income and spending may look quite different when you’re managing a household on your own. Reviewing your financial plan can help you understand what you have available and whether any adjustments are needed.
It can also help to consider the practical details, such as whether you’ll need a new mortgage, how much you’ll need for regular bills and what financial commitments you still have.
Remember the details that are easy to miss
When so much is changing, it’s understandable that some financial arrangements may not be top of the list. But a separation or divorce means you should check that everything still reflects your wishes.
This could include reviewing your Will, checking the beneficiaries named on your pension arrangements and updating any relevant life insurance or protection policies.
If you have a Lasting Power of Attorney, you may also want to review whether it still reflects your wishes. The effect of divorce on a Will can vary depending on where you live in the UK, so it’s worth getting appropriate advice.
Our sister company, Foresight Estate & Will Planning, can help you review your Will, wider estate planning and powers of attorney, so your arrangements reflect your wishes as your circumstances change.
Get a clear view of what’s ahead
There are legal and financial decisions to make during a divorce, and it’s important to understand how they fit together.
A solicitor can advise on the legal process and help with the financial settlement. A financial adviser can help you understand your pensions, savings and investments, and how different decisions could affect your longer-term plans.
At Insight, we understand that financial planning is about more than the numbers. It’s about understanding what’s important to you, listening to what has changed and helping you make informed decisions about the future.
If you’re going through a separation, your Insight adviser can help you review your pensions, savings and investments with your future in mind. We can also bring in our sister company, Foresight Estate & Will Planning, to meet with you alongside your adviser, so your financial plans, Will and estate planning reflect your wishes and what comes next. Get in touch today >
Sources and further reading
FAQs
Where do I start with my finances if I’m separating later in life?
Start by getting a clear picture of what you have and what you’ll need. This includes your home, pensions, savings, investments and debts, alongside your everyday costs. You don’t need to have all the answers straight away. Understanding your position can help you take the next step.
Why is it important to consider pensions during a divorce?
Your pension may be one of your most valuable assets, as well as an important part of your future income. It’s worth looking beyond its value on paper to understand what it could provide in retirement. This can help you consider pensions alongside your home and other assets.
Will I need to rethink my retirement plans?
Not necessarily, but it’s worth revisiting them. Living separately may change your spending, income and what you need from your savings. Whether retirement is approaching or already under way, we can help you understand what these changes mean for you and where adjustments may be needed.
Should I update my Will when I separate?
It’s a good time to review your Will and check that it still reflects your wishes. Pension nominations, protection policies and powers of attorney may also need attention. Separation and divorce can affect arrangements differently, and the rules vary across the UK, so getting appropriate advice is important.
Can Insight help me look at my financial plans and estate planning together?
Yes. We can invite experts from our sister company, Foresight Estate & Will Planning, to meet with you alongside your Insight adviser. Together, we can look at your wider financial picture and how your financial plans, Will and estate planning fit with your wishes for the future.
How does a financial adviser’s support differ from a solicitor’s?
Your solicitor (or our sister company Foresight) can guide you through the legal process and advise on your financial settlement. We can help you understand how decisions about your pensions, savings and investments could affect your life beyond the divorce. These different areas of support work alongside each other, helping you make informed decisions about what comes next.
Disclaimer: information is based on publicly available data and government announcements at the time of writing (October 2026) and may be subject to change. This article is for information only and does not constitute advice. The value of your investments can go down as well as up, so you could get back less than you invested.
