Research highlights the financial challenges faced by women
Divorce is a life-altering event and, for many women, it results not only in emotional turmoil but also in financial hardship. Research indicates that women generally see their household income halve within a year of divorce, while men’s incomes decrease by only 30%[1]. This gap leaves women more exposed, with 24% struggling to manage their finances compared to just 16% of men.
This financial shift exposes many women to harsh realities; nearly one in five (19%) find it difficult to afford basic essentials, nearly double the rate of their male counterparts. This vulnerability underscores a significant consequence of divorce: the difficulty of managing life on a limited budget alone.
Living alone comes at a higher cost
Living on a single income is significantly more expensive. Without the benefit of shared household costs, such as rent or mortgage payments and utility bills, women disproportionately carry the burden. Two-thirds of women (63%) identify the loss of dual financial support as a major challenge after divorce, compared to less than half (39%) of men.
For many women, financial adjustments involve making tough decisions. Those who previously relied on their spouse’s income now face greater pressure to attain financial independence, which often impacts their careers.
Career hurdles hold women back
More than half (51%) of divorces involve women who depended financially on their husbands. Some women view divorce as an opportunity to re-enter the workforce, with 19% doing so after their divorce. Nevertheless, managing new work responsibilities alongside family duties remains a challenge.
Caring for children or elderly family members often limits women’s career opportunities. For example, research indicates that twice as many women as men reduce their working hours to manage caregiving responsibilities (14% vs 7%). Additionally, one in five women (19%) find it difficult to balance work and childcare, compared to only 9% of men.
Long-term effects on retirement savings
The financial hardships women face after divorce do not end when they restart their careers. Divorce often leaves a lasting impact on retirement savings, highlighting the so-called ‘Divorce Gap’. Women’s smaller pension pots – a result of career breaks, part-time work and the gender pay gap – make them more vulnerable to financial insecurity in retirement.
Alarmingly, pensions are often neglected during divorce settlements, despite their significance as financial assets. Research shows that only 13% of couples include pensions in financial negotiations, and women are far more likely to relinquish their claim to a partner’s pension (28% versus 17% of men).
Source data:
[1] Opinium Research conducted 2,945 online interviews of UK adults who are divorced. The research was conducted between October 25 and November 12, 2024.
This article does not constitute tax, legal or financial advice and should not be relied upon as such. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. For guidance, seek professional advice. The value of your investments can go down as well as up, and you may get back less than you invested.