Linda Poulter on the Financial Implications of Divorce for Women
Alfred Lord Tennyson told us that in spring a young’s man’s fancy lightly turns to thoughts of love, and with Valentine’s Day just past and magazines full of spring bridal ideas, he could still be right. Last year the Mail Online reported that marriage rates were on the increase in the UK for the first time in a long time. And it may be that the optimism of these marrying couples may not be misguided as the Office for National Statistics reported a recent decrease in divorce rates.
However, it seems that people who are divorcing are doing so later in life with the greatest proportion of divorcing couples being aged 40 to 44 years old. And at this time of life any separation may well be complicated by children, large shared assets such as property or investments, shared business ownership and a lifetime’s accumulated possessions. It may be possible, like celebrity divorcees Gary Lineker and Danielle Bux to settle matters between you using a cheap online divorce, but even websites offering these warn against taking matters into your own hands without professional advice behind you.
And we’re all more aware these days of the impact that years of childcare can have on a woman’s State pension entitlement or how a career break can lower the earnings of a woman returning to work.
To find out more about what a professional adviser can offer someone finding themselves in this circumstance, we spoke to Meyado’s Linda Poulter who specialises in helping clients with their financial planning through and after a divorce. Linda fully qualified as an independent financial adviser 21 years ago and has spent the last 16 of those working specifically with (mainly, but not exclusively) female clients. By building a long-term relationship Linda finds that her clients start by trusting her to help with their financial decisions and over time learn to trust themselves to make their own sound decisions.
Q: Divorce can be very painful, how do you think good financial advice can mitigate some of that?
Linda: A lot of women and men are overwhelmed and frightened by the number of financial decisions which have to be made as a result of the divorce. Many have never been involved with financial decisions as the other partner made them all. Working with a good Financial Adviser can ease the burden by helping and supporting them whilst clearly setting out the financial options available to them and explaining in a clear way that they understand. As we work through the issues together I see them become confident and educated in respect of their finances, pensions and investments. Giving them the peace of mind that they will be financially independent and they have a trusted adviser who will continue to support them and monitor their financial affairs.
Q: What do you consider to be the most common fear amongst divorced women?
Linda: Many ladies often find large settlements create a huge amount of anxiety that they’re going to be preyed on by salesmen who push them into making large inappropriate financial decisions. They feel that they have become a target and now they have to make really important decisions for the well-being of their families; they want to do a good job and they want someone they can trust -this is where I come in and I help them exercise good judgement in an uncomplicated way.
Q: In which areas do you find women most lack knowledge of financial matters?
Linda: Women most lack knowledge in understanding pensions which may have been dealt with by their husband or partner. The other issue for some women is budgeting as again this may have been dealt with by their husband or partner. Once they get divorced they find it very difficult to budget for their monthly household expenditure.
Q: Are you seeing the effect of the pre-nuptial agreement has started to change how you offer advice?
Linda: A Pre-nup makes them more aware of the financial assets of their partner which helps to educate them. Also Pre-nups are becoming more important especially in second marriages where they may be bringing assets to that marriage and they have children from a previous relationship. It is also more prevalent with couples leaving it later to marry where they may have built up assets separately. People are more aware that relationships can break down so this can be a good way to organise their finances for that.
Q: From your experience of helping clients going through divorce, what advice would you offer young people entering into marriage now?
Linda: Both get involved with the financial decisions discuss things, and make financial decisions together. Do not rely on one person building up a pension fund. Generally you will find it is the man who has built up pension in his name and women do not see the value of the asset as it may not be an immediate need and or they may not realise just how valuable a pension can be. Historically women have been more concerned with the home and ignore the pension which can be an equally or even more valuable asset.
As Linda states, many people are remarrying and when a sound financial basis is brought to the relationship, with both parties clear on their rights and responsibilities, there is plenty of room to focus on “thoughts of love” as well.
You can follow Linda on Twitter at @meyadowealth.