Philip Pearson: Divorce is always painful but a fair settlement makes it less so

An estimated 2.2 million UK adults are delaying retirement due to the economic recession and the falling value of investments, according to the Prudential. Stock market investments, such as Individual Savings Accounts (ISAs), have been hit by the falls in the FTSE 100 index, and it is very difficult to find a decent rate of return on deposit accounts.

As a result, more than one in ten of those retiring this year are likely to receive an income of less than £10,000 a year from their pensions and investments.

Furthermore, couples currently selling their property to divide their assets could lose up to 22.5 per cent of the value of their home because of the fall in the housing market, and this has serious consequences for their retirement income.

“Divorce at any time in your life is a time of personal crisis,” says Philip Pearson, of the independent financial adviser P&P Invest in Southampton. “The financial consequences can be acute if the event takes place in the latter part of your working life and you have little time to build up resources.

“It is therefore vital that you obtain a fair and adequate settlement, which makes provision for your retirement income in the years ahead.  Very often women are at a significant financial disadvantage to men when pension planning is concerned.”

Liz Lyke, managing director of the independent financial adviser, Options for Women, and a pension specialist says: “Even today a lot of women leave the management of the family finances to their husband or partner. This can mean that when faced with divorce they feel overwhelmed with the many decisions to be made, a lot of which they don’t properly understand.

“The golden rule is if you don’t understand then ask until you do. The main items of value are usually the family home and (the husband’s) pension and these should be the areas of negotiation.”

By Marianne Curphey