Divorce in your 60s – The Financial Implications

Lisa Pepper

Divorce at 60 is becoming more common, and many older couples find themselves facing separation with limited financial resources. If you’re considering divorce at 60 with no money, or simply want to understand your options, this article explores the unique challenges and solutions available, including alternatives to divorce for older couples who want to avoid the traditional route.

How common is a divorce in your 60s?

The latest divorce figures from the Office of National Statistics (ONS) show that divorce is on the rise in England and Wales, particularly among the over-sixties.  2019 saw the most divorces for 50 years, and with a year of lockdowns taking its toll on relationships, further rises are predicted.

For those facing divorce at 60, it can be a daunting prospect, especially if you are worried about money.

What does divorce at 60 mean for your finances?

Divorce experts at London law firm Osbornes Law warn that divorcing once retired can have big implications for finances, especially where one-half of the couple has little or no pension provision.

Lisa Pepper, a divorce law expert at Osbornes Law, says, “Increasingly we are seeing couples looking to divorce later in life, often they are retired and after spending day in day out with one another decide to separate and make a clean break. One of my most recent ‘silver separators’ was an 80-year-old who decided she didn’t want to spend her final years feeling miserable.

“Many have put off divorcing due to worries about the potential impact on their finances, their ability to get a mortgage on their own, concerns about their pensions and the impact a split might have on their ability to pass on an inheritance to their children.

“Women, in particular, were often relying on their husband’s pension after career breaks to look after children, leaving them with only minimal pension provision.”

In cases where one party has a far larger pension pot, this can be split on divorce, with a percentage of the funds being transferred to the recipient’s chosen fund within four months of decree absolute.  That pension is then totally within their control, whether they want to take a tax-free lump sum or invest elsewhere.

“There is a lot of confusion around how pensions are treated on divorce, with many wrongly assuming they can be ring-fenced and not included as a matrimonial asset,” explains Lisa. “For those divorcing at an older age, they are all important and should not simply be split 50:50.  The percentage split should be carefully calculated with the help of a pensions actuary and factors such as the age of both parties and the regular income generated by the fund taken into consideration.”

In general, there are three main ways in which pensions are divided:

• Pension sharing – where a portion of the pension is transferred from one person’s pension to the other person’s pension.
• Pension offsetting – where one person keeps their pension and the other person receives an equivalent share of other assets, such as a bigger share of the family home.
• Pension attachment – where a proportion of the pension benefits are paid to the non-pension holder when the pension becomes payable.

Life after divorce in your 60s

Most people who go through divorce at 60 may need to downsize, as being retired or close to retirement makes it hard to get a mortgage The majority of divorcees will need to sell the house they share and buy in cash with their share of the proceeds.

Some will have concerns about their children’s inheritance should their ex decide to remarry.

Lisa says, “As part of divorce negotiations, older divorcing couples with children tend to agree that both will write new wills leaving at least half of their estate to their children.  Whilst this is not binding in law, most will stick to it and if not, the documentation can be used as evidence in the future, should the children wish to dispute their parent’s will under the 1975 Inheritance Act.”

Alternatives to divorce for older couples

Getting a divorce will not suit everyone. Divorce at 60 is not the only option for those who want to separate later in life. Alternatives to divorce for older couples can be especially helpful if you want to maintain certain financial or legal benefits, or if you’re worried about the impact of divorce at 60 with no money. Some couples choose a separation agreement, which allows you to live apart and set out how your finances will be divided, without formally ending the marriage.

Lisa explains, “An alternative to divorce is a separation agreement.  It is not as watertight as a court order, but it allows you to agree on splitting your finances and going your separate ways without ending your marriage.  Whilst it means that you cannot remarry and will not be able to transfer a share of your pension, you will be able to maintain the tax benefits of staying together and leave assets to your partner if you die, without them incurring inheritance tax.”

Speak to an expert

Whether you’re considering divorce at 60, worried about what divorce at 60 with no money might mean for your future, or exploring alternatives to divorce for older couples, our experienced team of divorce lawyers is here to help. We understand the unique challenges that come with later-life separation and can guide you through every stage-whether you want to avoid court, secure your finances, or simply understand your options.

For confidential advice tailored to your situation, call us today on 020 7485 8811 or complete our online enquiry form. Let us help you find the right path forward.