Maybe marital advice should be part of retirement support!
Coping with the difference in lifestyle you face in retirement is one thing, maybe it’s not good for marriage. A high number of couples split up rather than go through a changed lifestyle – it would seem.
While freedom from your spouse may seem attractive, the financial implications can be terrible. If you’ve been left in the lurch, double, bubble financial trouble could well follow.
There are 1 million more divorced people in retirement than there were 20 years ago — a total of 1.5 million. There are also more single pensioners who may have lived as part of a couple but ended up on their own in retirement.
Steve Webb has been surprised at how much interest he’s had from journos is in what divorce means financially.
This is the link that Steve has mentioned
Here is the link of this report (as mentioned by Steve)
Here is the headline of the Times once they’d read Steve Webb’s latest report for LCP.
£13,900 is Pension UK’s estimate of what you should earn to be out of pension poverty. Presumably the reference to the triple lock reminds us that even with it turned on, it hasn’t yet got those out of wedlock out of pensioner poverty’ 
Pensioner poverty has risen 18.5 per cent over the past decade, with widows and divorcees most at risk of falling below the breadline.
LCP, which looked at government data and surveys, said that pension wealth not being divided equally in divorce and the gender pension gap were putting women particularly at risk.
Steve Webb, now a partner at LCP, said:
“Some of the discussion about the position of pensioners seems to imply that pensioner poverty is largely solved. But pensioner poverty has been rising steadily since 2012.”
This is partly because there are 1 million more divorced people in retirement than there were 20 years ago — a total of 1.5 million. There are also more single pensioners who may have lived as part of a couple but ended up on their own in retirement.
The proportion of widows and widowers among the nation’s 13.2 million pensioners, which rose after the Covid-19 pandemic, has decreased slightly in the 20 years since 2004.
The future of the triple lock
LCP’s findings raised fresh questions about the future of the triple lock, which was introduced in 2011 with the aim of protecting pensioners from the rising cost of living. It guarantees that the state pension will rise every year in line with inflation, wages, or 2.5 per cent — whichever is highest.
The aim was to tackle pensioner poverty but LCP said that hardship was now more widespread than in 2014, when 15.7 per cent of pensioners were deemed to be living in poverty. In April 2024, the pensioner poverty rate was 18.6 per cent.
The triple lock policy been criticised as unaffordable. Estimates from the Office for Budget Responsibility says the guarantee it will cost £15.5 billion in 2030, three times higher than initially expected, and £10 billion above its original 2010 budget. The cost of providing the state pension in 2025-26 is estimated at £146.1 billion.
“giving pensioners an unconditional free pass when so many of the rest of the population are struggling”
He said:
“The problem for the government is that while poverty rates may have risen for pensioners, they are still less likely to be living in poverty than a whole host of other cohorts, including children, working age adults, the disabled, people in rented accommodation and people of Bangladeshi, Pakistani, African or Caribbean heritage.”
Those living in poverty
A full new state pension is worth £12,548 a year. Retirement living standards produced by the industry association Pensions UK put the cost of minimum standard of living in later life at £13,900 a year for a single person, £22,500 for a couple. This would allow for £57 a week to spend on groceries, £42 a month on meals out and takeaways, one week’s holiday a year in the UK and assumes that you have no housing costs.
Couples have always had lower poverty rates because they can share expenses, and the rise in overall pensioner poverty has been driven almost entirely by those living alone.
LCP found that roughly two-thirds of the single pensioners living in poverty were women. It suggests that there should be more incentives for a higher earner in a couple (often a man) to pay into a lower-earning partner’s private or workplace pension (often a woman). At the moment a higher rate taxpayer earner can get higher rate tax relief on contributions to their own pension but only basic rate relief if they pay into a basic rate paying partner’s pension.
LCP also said there should be better pension sharing in divorce. The move to no-fault divorce in 2022 may be encouraging couples to make a “clean break,” Webb said, but may mean that they are avoiding setting up pension sharing arrangements, which can be complex, messy and time-consuming.
Catherine Costley, a family divorce lawyer at the London law firm Fladgate, said:
“Everyone brings different perspectives and priorities to a divorce. Women are concerned about financial provision in their retirement years but they still need a roof over their heads today. If your goal is to preserve the family home then it is easy to think about the shorter term benefit of that.
“Today’s problems need solving today, whereas people assume there is more time to find a solution for tomorrow’s problems. However, if your pension is always tomorrow’s problem you can be caught out.”
When unmarried couples split, there is no legal framework for sharing any private pensions. The Ministry of Justice began a consultation in June this year to look at strengthening the rights of couples who live together.
LCP has recommended that annuities (insurance products that pay out an income for life, often bought with savings from a pension pot) should become “joint life” by default, so that those who lose their partner are better cared for. Webb said:
“We need to look at social changes, such as the growth in cohabitation, and understand what these mean for later-life finances. It is vitally important that the government’s Pensions Commission looks in depth at these issues when drawing up its blueprint for the future of pensions.”