Divorcees take five years to financially recover
Divorced couples take five years to recover their financial position following separation, according to an AMP report.
The latest AMP.NATSEM report revealed divorced parents between 45 to 64 years had 25 per cent less assets than their married counterparts.
AMP chief customer officer, Paul Sainsbury, said with Australians now tending to divorce later (during their mid-40s and prime wealth accumulating years), the long-term financial impacts could be considerable.
Sainsbury said being prepared for a financial shock such as divorce could in fact shave a year off the five-year recovery period.
"A marriage breakdown is devastating for your finances in the near term and its impact can continue into old age and have serious consequences for financial living standards and retirement prospects later in life," he said.
"Being financially independent and actively engaged with your finances and planning ahead for financial challenges such as divorce can go a long way towards reducing its harmful effects."
The report also found superannuation balances for divorced mothers were 68 per cent lower than married mothers, while on average a divorced mother had 37 per cent less super than a divorced father.
Divorced fathers aged between 45 and 64 were found to have 60 per cent less super than married fathers five years after a marriage breakdown.
More than 20 per cent of newly-divorced mothers were found to be struggling to afford basic items including school uniforms and leisure activities.
In terms of employment, while the proportion of women returning to the workforce following a divorce was on the rise, their income was about 10 per cent lower than married women.
However, the income of a divorced father was 26 per cent higher than the income of a matched married father.
Recommended for you
AFCA has confirmed United Global Capital’s membership of the body will not be extended to accept further complaints, avoiding a repeat of the Dixon Advisory scenario.
Three of Australia’s largest financial advice groups have shared their thoughts with Money Management on whether they would include crypto on their approved product lists.
Shadow treasurer Angus Taylor has vowed to introduce a bill to legislate a raft of financial services reforms if the Coalition is elected.
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
