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The biggest financial risk for women today? Embarking on a relationship

It was five years ago that Emma Cooper and her husband separated. Since then, her divorce has dominated her life. The 47-year-old has spent much time and energy fighting her ex in court
– over custody of their three children and financial support – with legal bills topping £85,000.

Her former partner, a banker, dropped his maintenance payments to a bare minimum after being made redundant, despite having a six-figure payout and the strong likelihood of another job in the pipeline. Cooper is now hoping her case may see a change in the law, where redundancy payments can be taken into account as income in child support cases.

“When he left, his attitude was ‘and I’m taking my money with me’. He uses money to punish me. He pays late, he doesn’t pay the right amount, or doesn’t pay at all. He stays in control, and in my life, in a continuation of a very toxic relationship.”

Luckier than many women in the same position, Cooper lost the family home but has a house for herself and her children. “Not that it is an asset I can sell, as we need to live in it,” she said. “My pension is worth £18,000; his is £228,000.

“I know I’m luckier than most – most women I know got nothing, and had to get on with it. Anyone who had a partner who is self-employed is completely screwed. Women who gave up work or financial independence to raise children are just stuffed by divorce.”

Her view is perhaps skewed by her experience, but it does have the heavyweight backing of a new report by the Chartered Insurance Institute (CII), “Risk, exposure and resilience to risk in Britain today”. The research emphasises that divorce and separation are a significant financial risk to women left “vulnerable” by joint decisions made while they were in a long-term relationship. The average divorced woman has less than a third of the pension wealth of the average divorced man, while 10% more divorced women expect to rely on the state pension than men, 41% of whom have an occupational pension. To compound this issue, women are more likely to have more caring responsibilities, and to suffer mental health problems.

Barbara Reeves, a partner at Mishcon de Reya, has decades of experience in family law. She says risk is inevitable in divorce – and managing it is crucial. “There is a perception that women in England do well out of divorce – with London being described as the world’s divorce capital,” she said. “But it’s important to remember that if this is the case, it is only so for the wives of the super-wealthy. The reality for most women is that they have often created homes, raised children and supported their partners while their own careers have stood still, or progressed at a considerably slower rate.

“The money these women could have earned – and consequently their potential to save for their own future long-term needs, including retirement – has been significantly compromised.
“Divorce has always been a daunting prospect for the financially weaker party, and historically this has been the woman. It is not so much the cost of the proceedings that is daunting – but the aftermath. As the CII report shows, typically it’s women who absorb the risk: those in middle age can find themselves unemployable in an industry they may have thrived in before their marriage and/or having children.

“Once their children have grown up and any maintenance payments begin to dry up, they are often forced to rely on state provision. As Sian Fisher of the CII points out in the report, the historic support systems are receding: ‘We’re all expected to look after ourselves. On top of this, [women] may be caring for elderly parents and contending with their own mental or physical health issues.’ ”

But Reeves adds: “Divorce is a far less daunting prospect for women than non-marital separation: we still see women who have spent decades as a homemaker, raising children … being forced to walk away at the end of their relationship with nothing. If she was married, the ‘homemaker’ has a right to share a partner’s pensions. However, this is a share of the pension assets at the time of the divorce.

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