A legal expert says pension reforms that make it easier for retirees to access their savings could lead to an increase in “silver splitter” divorces.
The reforms, which take effect in April, mean that from the age of 55, people will have the freedom to take their pension as a lump sum, or series of lump sums, rather than having to buy an annuity.
Nicola Harries, a partner at South East law firm Stevens & Bolton, told the Telegraph on 27 December that much easier access to lump sums from a pension pot could take the brakes off a decision to divorce, where a husband or wife might have initlally held back from going down this route because they did not want to sell the family home and downsize when assets were split, due to lack of access to capital.
Ms Harries said: “If there are ways of addressing issues, particularly of capital, that may well encourage people to take a step they might not have taken.”
“We often see people who will put their toe in the water for a bit of advice and then go away for a few years. But if they are aware that there are options on the table, I think that might [encourage] people.”
In 2013, the Office for National Statistics reported an increase in divorce rates amongst over-60s, in contrast to a general decline in divorces overall.
Financial arrangements can be particularly challenging where there are substantial assets involved, which may be more likely when the people involved are in later life.
Surjit Verdi, a solicitor in Palmers’ Family Law team, said: “Even when a couple are on amicable terms, the process of ending a marriage and dividing assets is always likely to be a difficult time.
“Divorce at any age can be a stressful experience but for older couples it may be further complicated by the fact that they may have accumulated more substantial assets – a valuable pension, for example, a business or substantial property assets – that must be taken into account when making financial arrangements on divorce.
“Expert legal advice can be crucial in resolving financial and other issues and the non-confrontational approach followed by Resolution members, such as the family law team at Palmers, can be very helpful in settling matters in a constructive, non-court-based way. For more information, please contact us.”