Individuals considering divorce in 2026 are facing a stark financial warning, with new analysis suggesting their annual income could fall by an average of £7,753. A significant report from financial services giant Legal & General highlights the severe and lasting economic impact of separation, particularly for older couples.
The Lasting Financial Impact of Late-Life Splits
The research underscores a critical issue for those divorcing later in life. It found that almost a quarter (23%) of people who divorce over the age of 50 now expect to retire on a lower income than they had originally planned. The challenge of rebuilding savings after a split is immense, with almost a quarter of older divorcees reporting they struggle to do so.
This financial strain has direct consequences for retirement plans. The report indicates that more than 200,000 people who divorce after 50 (15%) are forced to delay their retirement as a direct result of their changed financial circumstances.
The Critical Pension Oversight in Settlements
Alarmingly, the report identifies a major gap in how pensions are handled during divorce proceedings. Despite being one of the most valuable assets a couple may own, only a quarter (25%) of over-50s who divorce include pensions in their settlement discussions.
Even more concerning is that almost a third (31%) waive their rights to their partner’s pension entirely, a decision that can have devastating long-term effects on financial security in retirement. Lorna Shah, Managing Director of Retail Retirement at Legal & General, commented on the compounding pressures, stating: “Retirement incomes are being stretched further than ever as people live longer and often enter retirement without sufficient savings. A divorce can make this challenge more complex.”
The January Surge in Divorce Enquiries
The start of the year, particularly January, is a peak time for divorce considerations. Family law firms consistently report a 20 to 30% increase in enquiries during January compared to other months, a trend mirrored by online search activity and increased demand for mediation and counselling services.
Legal experts point to the introduction of no-fault divorce in April 2022 as a factor changing the landscape. A spokesperson for Elite Law Solicitors explained: “Since the introduction of no-fault divorce... the emotional and procedural barriers to divorce have reduced. With this approach, there is no need to ascribe blame... and there is a greater focus on practical arrangements.”
The firm advises that January can be a sensible time to seek early legal advice, even if immediate action isn't planned. They stress that speaking to a specialist solicitor can help individuals understand their position and plan effectively, potentially mitigating some of the severe financial fallout highlighted in the Legal & General report.
