The rise of the silver splitters was first widely reported a few years ago however new enquiries to our specialist Family Law team suggests that this phenomenon is showing no signs of slowing down. We are each increasingly acting for spouses who are at or approaching retirement age. It is questionable why so many people within this age range are choosing to separate, it could be because people are now living longer than ever and there is a general change in social attitude towards divorce. It is also arguable that the baby boomer generation are those in a better financial position and are able to achieve independence in retirement.
The position for those separating and divorcing later in life raises some specific issues to consider. Pensions in particular often become far more relevant as often they amount to a significant asset to be shared. The relaxation of pension regulations in April 2015 gives the over 55’s a high degree of flexibility where their pension funds are concerned. Subject to the tax consequences which arise from withdrawing funds, the whole pension pot can often be encashed thus releasing often considerable sums of capital to the pension holder. This can provide for the purchase of a property post-separation rather than relying upon the pension to provide income which would traditionally have been the case.
The ‘pension gap syndrome’ can also become a feature of cases for silver splitters This can arise where one party has retired at a relatively early age and is in receipt of a pension payment. Should the couple separate that pension will usually comprise part of the pot of assets to be divided. A pension share may result in an immediate reduction of the retired parties income whilst not creating any immediate benefit for the receiving party who may not yet be of an age to drawdown on the pension. Many people are not aware that a pension that is already in payment can be shared as part of the settlement.
The case of SS v NS can also apply. This case makes it plain that divorcing spouses should not expect to be financially kept for life. Life after divorce is about adjusting with a degree of hardship. It is possible therefore that despite being of or at retirement age that one party or even both parties could find themselves in a position of having to return to some form of work to help meet their needs.
Facing divorce can be difficult at any age but for those in or approaching retirement there may well be added complications which require careful thought and professional advice. Our team of specialist family law experts can guide and support you through the process with practical and cost effective advice. Sarah Power is a Partner at Chadwick Lawrence and oversees their team of specialist family lawyers based at their offices across West Yorkshire. The team offers flexible appointments and an initial free half hour appointment. If you need to find out where you stand contact us on 0800 015 0340.