Leading North East’s family law specialist, Joanne Major of Major Family Law, Newcastle’s best divorce and children’s specialist lawyers, comments in the North East Times, recent statistics have shown the dramatic increase in divorce rates in the over 60’s. In its most recent report, the Office for National Statistics produced a specific study on this age group for the first ever time.

Various explanations have been advanced for this increase, including changing attitudes towards divorce, increased financial independence within marriages of that age group, and most predominantly, the fact that people generally are living longer.

While in 1991,a typical 60-year-old man in England could expect to live another 21 years that figure has risen to 26 years. The pattern for women is similar.

Whatever the reason for the trend in general terms, it is nevertheless a momentous decision to end a marriage, and often in these particular instances, the marriage in question is one of significant duration: while the average divorcing couple has been married for just 11½ years, over 60s who do so have been together for around 30 years on average.

When it comes to a division of the marital assets, the length of the relationship and the contribution made by each of the parties are material considerations, along with a number of other factors including the standard of living enjoyed by the couple prior to the divorce.

There is no strict mathematical formula to how matrimonial assets should be divided, and at a judicial level the decision is mainly discretionary. From past decisions that judges have made, however, it is clear that the courts are driven by the principles of need, compensation and sharing.

This is being brought sharply into focus with the intended pension reforms introduced by the Chancellor and due to come into force in April of this year. For couples approaching or at retirement age, property and pensions are likely to be the two largest assets to be divided. From April, those aged 55 or over will be able to access their entire pension pot as cash should they wish to do so.

For some, this may allow more freedom for retirement planning and may prevent a forced sale of the former matrimonial home. Of course, that is only a small part of the picture. Whilst it has the potential for greater capital freedom, opting to take a chunk of capital out of a pension has two main implications: there is likely to be a tax liability as a result of the withdrawal; and removing the capital removes the size or source of an ongoing income, which is relevant to the parties’ ability to support themselves beyond the divorce.

Even without the reforms, pension funds can be split and equalised as part of a divorce settlement, but pension are a complex area and independent financial advice is always recommended to value the pension fund and to advise as to the most efficient way of dealing with it.

Divorcing couples will now be able to look at potential settlements which allow the party with the larger pension to retain that pension by instead agreeing to pay a lump sum, or a series of lump sums – funded by them taking advantage of the ability to drawdown.

This latter option may prove the most attractive because it is more tax effective than one single withdrawal of a large lump sum.

What may also assist in future planning to allow for a fair division of assets is the provision introduced by the government allowing all people aged 55 or over to obtain a free state pension statement which will show the amount of pension they will be entitled to receive following retirement.

This will allow for more certainty when calculating and balancing assets.

The reforms are not without their critics, but with divorce for the older generation on the increase, they have the potential at least to make for a fairer financial settlement.

Joanne Major is the Principal at Major Family Law, the Divorce and Family Law Specialists, 12 West Road, Ponteland, Newcastle upon Tyne. T: 01661 82 45 82 www.majorfamilylaw.co.uk. Twitter: @majorfamilylaw

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