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 | Lancashire Times A Voice of the Free Press |
12:15 AM 2nd December 2021
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Divorce Costs £150,000 And The Impact On Wealth Is Rising
Photo by engin akyurt on Unsplash
The average wealth of married affluent people is currently £780,405, compared to £629,826 for divorced people – a gap of £150,579 – and the longer-term financial impact of divorce is rising, Handelsbanken Wealth & Asset Management’s analysis of Government data found. Figures show the impact of divorce on wealth 10 years ago was £121,378, with married people worth an average of £612,500 compared to £491,121 for those who have been divorced.
“Divorce has a huge impact on couples’ lives quite apart from the emotional impact and the effect on families,
Handelsbanken Wealth & Asset Management analysed Government data on the wealth of affluent people – those with household net financial wealth of more than £200,000 – and the impact of divorce over the last 10 years, until November 2020, which has seen a 25% drop in the number of divorces to below 100,000 a year. The cost of divorce can be severe, driven partly by rising wealth, but also by the average age at divorce.
Government statistics show the average age at divorce for men is 46 and for women it is 43. Over the past decade, the age has increased from 43 for men and 41 for women, as couples are increasingly getting married later.
The increased age is significant because Handelsbanken Wealth & Asset Management’s analysis shows that affluent individuals amass the most wealth in their 40s – on average they accumulate £148,000 between the age of 40 and 50, at a rate of £14,800 a year. By contrast, in their 30s, average wealth only increases by £1,939 a year.
Affluent individuals are also becoming more affluent – data shows average wealth has increased by 30% in the past decade from £435,828 to £565,191 – an increase of nearly £130,000. The average household wealth of a man at divorce currently stands at £691,525 – a £151,680 increase over the past decade while for women it’s £515,948 and £145,978 higher over the same period.
Christine Ross, Head of Private Office (North) and Client Director at Handelsbanken Wealth & Asset Management said:
“Divorce has a huge impact on couples’ lives quite apart from the emotional impact and the effect on families, with people having to split their wealth and in many cases buy new homes.
“Finances are clearly a major part of divorce and the long-term impact on average wealth at more than £150,000 illustrates the need to think through the issues and where possible take advice from someone independent who can help support both people and find a financial solution which works for both.”
“Divorce has a huge impact on couples’ lives quite apart from the emotional impact and the effect on families, with people having to split their wealth and in many cases buy new homes.
“Finances are clearly a major part of divorce and the long-term impact on average wealth at more than £150,000 illustrates the need to think through the issues and where possible take advice from someone independent who can help support both people and find a financial solution which works for both.”
The most recent Government data on divorce shows there were 91,299 a year – the first time the number has dropped below 100,000 since 1971 – although the figure may be higher as there have been delays in processing applications.
The average number of divorces for the past five years, Handelsbanken Wealth & Asset Management’s data shows, is 107,209 compared to the annual average of 246,245 marriages.