Later life divorce: the risk to retirement plans nobody thinks about

While divorce at any age can be challenging, L&G’s latest research suggests that separating later in life can seriously impact retirement plans.

L&G’s findings reveal that more than 15% of those who divorce after the age of 50 are forced to delay their retirement due to the financial strain of separation*. For those who may have been approaching retirement with a clear sense of direction, divorce can fundamentally alter the picture, turning what should be a period of planning for the future into one of rebuilding it.

A financial shock at the worst possible time

The research highlights just how disruptive later-life divorce can be. On average, people who divorced after 50 saw their annual income fall by £7,753 in the year following their divorce. At a time when many expect earnings to be stable or winding down, that drop can be deeply challenging.

Rebuilding finances later in life can be an uphill struggle. Nearly one in four (24%) say it’s more difficult to rebuild savings because they’re past their peak earning years. More starkly still, 13% of later-life divorcees, around 180,000 people, don’t think they’ll ever recover financially.

Unlike younger divorcees, those separating later in life often have fewer working years ahead. They may be living with health considerations and have less flexibility to absorb financial shocks. This combination makes every decision more consequential, particularly around pensions, property and retirement income.

Retirement plans rewritten

Unsurprisingly, these pressures flow directly into retirement planning. Almost a quarter (23%) of people who divorce after 50 now expect to live on a lower income in retirement than they originally planned. Meanwhile, one third (32%) say they’ll need to downsize their home because of their divorce.

For many, the family home is both their most significant financial assets and one of the most emotionally complex. Decisions around whether to sell, keep or release equity can have a real impact on long-term retirement outcomes. While downsizing is often seen as the default response, it’s not always the most practical or desirable option. Your clients may understandably be reluctant to disrupt established support networks by moving house, or to lose the stability of the family home with all its memories.

In some cases, later-life lending options, such as lifetime mortgages or retirement interest-only mortgages, may form part of a broader financial planning conversation. These solutions can help some clients manage housing needs following divorce, whether that means buying out a former partner, achieving a clean financial break or maintaining stability through retirement. As with any major financial decision, careful consideration and professional advice are essential.

Pensions: the asset many overlook

Despite their importance, pensions are frequently overlooked during divorce settlements. The research found that only 25% of people who divorce after 50 include pensions in settlement discussions. At the same time, nearly a third (31%) waive rights to their partner's pension, yet just 8% seek financial advice before doing so.

Given that pensions often underpin retirement income, whether through annuities, drawdown or a combination of both, these decisions can have lasting consequences. Without professional guidance, later-life divorcees risk making choices that significantly undermine their long-term financial security.

A wider impact on families and inheritance

The financial effects of later-life divorce extend beyond personal retirement plans. One in five (20%) say they may no longer be able to leave an inheritance, while 17% feel it may become harder to support adult children financially in the future. What begins as a personal life change can quickly ripple out with lasting implications across generations.

The value of expert support

Divorce isn’t simply a legal process. It’s an emotional and often overwhelming life event. For your clients separating later in life, the pressure to make long-term financial decisions (frequently under time constraints) can make it difficult to fully understand the implications for retirement income, housing and financial security.

This is where L&G’s expert financial support can make a real difference. Decisions involving pensions, annuities, property and later-life lending are deeply interconnected. Taking a holistic approach can help your clients avoid unintended consequences that could affect their standard of living for years to come.

Having access to specialist expertise can help your clients feel much more confident when navigating these complex conversations. Whether the challenge is assessing pension options, understanding the impact on retirement income, or exploring housing solutions following divorce, financial advice can help ensure decisions are grounded in a client's long-term needs rather than short-term pressures.

While divorce inevitably brings both emotional and financial strain, the right support can help guide your clients through this difficult transition, protecting their retirement prospects and helping them move forward with greater confidence.

Speak to L&G’s team today to find out how their lifetime mortgages can support your clients through a later-life divorce.

*Opinium Research conducted 2,750 online interviews of UK adults who are divorced, of which 471 divorced after age 49. The research was conducted between the 6 and 25 November 2025.