Why a Majority of Divorcees Are Left With Nothing or Debt

Family lawDecember 31, 2023

Contrary to the glitzy portrayals in the media, divorce is not always a saga of vast wealth and extravagant legal battles. The Fair Shares Project, a groundbreaking study on the financial aftermath of divorces in England and Wales, reveals a stark reality.

Most divorcing couples, as discovered in our survey of 2,415 individuals who divorced up to five years ago, face a challenging financial landscape. Astonishingly, 17% of divorcees had no assets at all, while 23% found themselves with nothing or only debts post-divorce.

Pexels | Karolina Grabowska| 17% of divorcees had no assets at all.

The Hidden Financial Realities of Divorce: Unveiling the Numbers

28% of divorcees lived in rented accommodation, with limited capital aside from their pensions.
A surprising 21% ended up with less than £25,000 in assets.
The median net value of assets (including property and pensions) was £135,000, with 28% having assets below £100k and only 9% boasting over £1 million.

Financial Gender Disparities: A Deeper Dive

Our study sheds light on the financial inequalities within marriages, with wives often earning less due to childcare responsibilities. This disparity extends to pension pots, leaving divorcing wives facing greater financial challenges later in life. Astonishingly, only 11% of divorcees had arranged a pension share, and of those, just 22% shared it equally.

The Pitfalls of Ignorance: Financial Awareness During Divorce

Pexels | Karolina Grabowska | 38% of divorcees admitted to having poor knowledge of their ex-spouse’s finances.

38% admitted to poor knowledge of their ex-spouse’s finances during the marriage.
A third did not know the value of their own pension, while 10% were clueless about the equity value of their matrimonial home.

Seeking Help: A Crucial But Neglected Aspect

While fear of legal costs deterred many from seeking advice during divorce, our study debunks the misconception that legal help is exorbitant. Surprisingly, 24% spent less than £1,000, and only 9% faced costs exceeding £10,000.

Long-Term Impact: The Lingering Effects of Poor Financial Deals

Data comparing household incomes up to five years post-divorce paints a sobering picture. Female divorcees, particularly mothers and those over 50, often found themselves worse off than men, even with new partners. The study emphasizes the need for accessible advice and support, as well as a fair evaluation of all available assets, including pensions.

Rethinking Legal Approaches: Beyond the 50/50 Split

Pexels | Mikhail Nilov | 28% opted for an equal split in divorce, while the majority focused on meeting needs.

Despite calls for a 50/50 split in marital assets, our study indicates that this model may not align with the needs or priorities of most divorcees. Only 28% opted for an equal split, while most focused on meeting needs or reclaiming what they invested in the marriage.

A Call for Reform: Empowering Divorcees With Information and Support

Rather than reforming substantive law, our study suggests a dire need to enhance accessibility to advice and support for divorcing couples. Affordable, appropriate, and authoritative information can empower couples to negotiate fair deals, considering all available assets, and ensuring a smoother financial transition post-divorce.

A fair deal, we argue, is one that leaves no stone unturned, considering each individual’s unique financial landscape.