Divorce Over 50: What Should You Consider as You Navigate Later-Life Separation?

Going through a divorce is never easy, but when it happens after age 50—some unique challenges and considerations may not apply to younger couples. Separating in your 50s or beyond can have significant financial, emotional, and lifestyle implications, especially when preparing for retirement.

If you’re over 50 and facing divorce, here’s what you need to consider to ensure you make informed decisions and safeguard your future.

1. Retirement Is Around the Corner—Consider Your Long-Term Financial Security

For couples in their 50s or older, retirement is either on the horizon or already a reality. One of the key concerns is how the divorce will affect your retirement plans. Unlike younger couples, who have more time to rebuild their financial lives, those over 50 have less time to accumulate savings and investments after the divorce.

Key considerations:

• Pensions and Retirement Accounts: These can be some of the most significant assets in a later-life divorce. Ensure they are properly valued and included in the settlement. You may need a financial adviser to help assess how pensions should be divided to ensure both parties have enough to retire on.

• State Pension: You can’t directly divide a State Pension, but divorce could affect your entitlement, especially if your ex-spouse paid National Insurance contributions that you may have relied on.

• Revisiting Retirement Plans: Depending on how assets are divided, you may need to delay or adjust your retirement lifestyle expectations. If you planned to retire jointly, losing your partner’s income or savings could mean significant changes to your financial outlook. Even though your situation might not be what you expected, it’s empowering to understand your new situation by reaching out for financial advice. The certainty can put your mind at rest.

2. Downsizing and Housing: Do You Still Need That Big House?

After years of marriage, many over-50s have accumulated significant equity in their home. However, maintaining a large family home on a single income after divorce may not be financially feasible or necessary. You may need to consider downsizing or selling the house altogether. Alternatively, you might want to stay put but you’re unsure about whether you can afford it.

Things to think about:

• Equity Release and Later Life Mortgages*: There are alternatives if you want to stay in your home. You can use Equity Release or later-life mortgages. Some over-50s explore the option of equity release to fund their future, particularly if they want to keep their home but need extra income.

• Consider Future Needs: As you age, it’s essential to consider whether your home will continue to suit your needs. Downsizing can free up cash for retirement while also providing a more manageable living situation e.g. accessibility and being near to your support network.

3. Health and Care Considerations

Divorce over 50 can have unique health implications, both emotional and physical. Your health may already be a concern and managing it alone after divorce can be daunting. Planning for the future, including potential care needs, is critical.

Important considerations:

• Healthcare Costs: As you age, medical expenses can rise. It’s essential to consider how you’ll manage healthcare costs, especially if you previously shared these with your spouse.

• Long-Term Care Planning**: Consider how divorce affects your long-term care needs. Will you need to factor in the cost of care homes, assisted living, or in-home care services? These are significant expenses that should be planned for well in advance.

4. Financial Independence: Adjusting to Single Life

If you’ve been married for many years, particularly in a marriage where one spouse was the primary breadwinner, becoming financially independent may be a new challenge. Managing your finances alone after years of joint decision-making can be intimidating but necessary.

Key points:

• Relearning Finances: If your spouse handled the finances, you might need to educate yourself on budgeting, investment planning, and managing bills. You don’t have to do this alone.

• Reassessing Insurance: Don’t forget to review life insurance, health insurance, and other policies that may need updating post-divorce. For example, you may no longer benefit from your ex-spouse’s life insurance policy. 

Look out for my separate blog on reassessing insurance.

5. Emotional Considerations: Building a New Life After Divorce

Divorce later in life can feel especially daunting because it often means redefining your future after decades of shared experiences. The emotional toll of divorce at this stage can be heavy, but it also provides an opportunity to reflect and build a new life.

Things to remember:

• Support Networks: You might find that your social circle changes after a divorce, especially if many of your friends are mutual. Lean on close family, friends, or support groups to help you navigate the emotional transition.

• Rediscovering Independence: Divorce after 50 often means relearning who you are as an individual. This can be a time for personal growth, rediscovery, and finding new passions or hobbies that perhaps took a back seat during your marriage.

6. Inheritance and Estate Planning: Time for a Review

After a divorce, it’s essential to review your estate plan to ensure that your assets are distributed according to your wishes. This is especially important if you have children or other dependents.

Key actions:

• Update Your Will***: If your ex-spouse is listed as a beneficiary in your will, you’ll likely want to update it. You may also need to reconsider guardianship or trusteeship if children or dependents are involved. When your divorce is finalised your old Will is no longer valid. However, the time between deciding to separate and your degree absolute can be years.

• Revisit Powers of Attorney***: If your spouse is listed as your power of attorney for health or finances, it’s a good time to appoint someone else you trust.

Conclusion: Seek Professional Guidance Early

Divorce over 50 presents distinct challenges that require careful planning and consideration. The financial and emotional complexities of divorce mean that getting the right advice early on is crucial to protecting your financial future.

Whether you need to ensure pensions are divided fairly, adjust your retirement plans, or rethink your living arrangements, professional advice from a financial planner and a solicitor will give you the confidence to make informed decisions.

Divorce is never easy, but with the right guidance and support, you can emerge from it, ready to embrace the next chapter of your life. If you need assistance navigating the financial implications of your divorce, don’t hesitate to reach out on:

Jamie Lowe- Financial Adviser and Director of True Self Wealth Ltd

Get in touch: 07469 712299 Jamie.Lowe@SJPP.co.uk

To find out more, visit www.truselfwealth.co.uk

To book an appointment, visit www.calendly.com/jamie-lowe-tsw

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*This is a lifetime mortgage or home reversion plan. To understand the features and risks associated with such products, please ask for a personalised illustration.

**This may involve a referral to Karehero, a comparison and care matching provider, whose services are separate and distinct to those offered by St. James's Place.

***Will writing and Powers of Attorney involve the referral to a service that is separate and distinct to those offered by St. James's Place and along with Trusts are not regulated by the Financial Conduct Authority.

True Self Wealth Ltd is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group’s wealth management products and services, more details of which are set out on the group’s website http://www.sjp.co.uk/products

SJP Approved 15/10/2024