Pension poverty – 1000s face income worry as divorce rate soars

New research shows a growing number of couples are divorcing in later life and separation can deal a critical blow to the financial wellbeing of both parties.

1000s at risk of pension poverty after divorce
Pension poverty after divorce – 15% unaware pension affected after split.

Latest figures from the ONS1 show that in 2020, there were 103,592 divorces granted in England and Wales, but with a new law that came into force on the 6th April 2022 making it much easier for couples to get divorced through a ‘no fault’ plea2, this figure is likely to increase in the coming years.

Thinking about family finances may be the last thing couples want to do at this difficult time. However, it’s important to understand the impact that divorce will have on finances, including pensions.

The UK currently holds £15.2 trillion pounds in household wealth3.  Private pensions represents the biggest single component of this wealth – at around 42% of the total (£6.4 trillion).  Agreeing a fair separation of this pension wealth at a time of divorce will be critical to the future financial well-being of both parties.

Pension poverty after retirement

As the average age for getting divorced hits an all time high of 47 years and 5 months for men and 44 years and 9 months for women4, it’s fair to assume that the levels of wealth accumulated in couples’ pension pots may also be fairly high.

However, new research from Aviva suggests that 15% of divorced people didn’t realise their pension could be impacted by getting divorced and more than a third (34%) made no claim on their former partner’s pension and it was not included as an asset in the settlement when they did divorce. Worryingly, almost one in twelve (8%) divorcees say they didn’t have their own pension savings as they were relying on their partner to finance their retirement.

Working longer to avoid pension poverty

As a result of divorce, as many as one in five (19%) say they will be, or are, significantly worse off in retirement.

To supplement their income following a divorce, a third of divorcees (32%) said they dipped into their savings; one in five (20%) used credit cards for everyday living expenses; a similar number (18%) borrowed from friends or  family; and just over one in seven (15%) regularly sold clothing/toys/other household items just to make ends meet.

One in eight (12%) respondents admitted to having to go out to work, having not worked before their divorce, or get a second job (10%). Worryingly, one in eight (12%) also cut back, or cancelled, their pension contributions – putting their future retirement income further at risk.

Commenting on the findings Alistair McQueen, Head of Savings & Retirement at Aviva said: “The breakdown of a marriage is often referred to one of the most traumatic and stressful events anyone can go through. Divorce can also be a costly experience, often including legal fees, a new home, a new car and new childcare costs. So, it’s perhaps predictable that so many need to rely on savings or credit cards for support during this time.

“It’s critical that, as part of the separation process, couples take time to think about and discuss one of their single most valuable assets, their pension.

“It’s common that one party will have significant pension provision, and the other party may have little or none. Clearly, this could be a relevant factor in any divorce. There are several options available to the Family court when dealing with pensions at divorce – pension sharing, earmarking and offsetting against other assets5. It can often be a very complex issue so, as well as hiring a family lawyer, it would be advisable for couples to contact a financial adviser to walk them through the pension valuation and financial process. You mustn’t underestimate the value of pensions at this time.”


  1. Divorces in England and Wales – Office for National Statistics (
  4. Divorces in England and Wales – Office for National Statistics (

Contains public sector information licensed under the Open Government Licence 3.0.

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Last modified: May 3, 2022

Written by 2:03 pm News & Views