UK Women’s Incomes Halve in the Year After Divorce — Why the “Divorce Gap” Persists and How to Protect Yourself

Divorce isn’t just the end of a marriage — it’s often the beginning of a steep financial drop, and for women in the UK, that drop is far steeper than for men.

New research from Legal & General (L&G) has revealed a stark statistic: women’s household incomes fall by 50% on average in the year after a divorce, compared with a 30% decrease for men.

Almost one in five women post-divorce struggle to afford essentials such as food, double the proportion of men in the same position. The insurer has dubbed this the “divorce gap”, a financial disadvantage that not only starts immediately after separation but can persist into retirement.

This article explores why this gap exists, the key legal and financial pitfalls that contribute to it, and what steps women can take to safeguard their financial future during and after divorce.

1. Why Women Face a Steeper Financial Decline After Divorce

Reliance on a Single Breadwinner Model

According to L&G’s findings, 51% of divorces involve women who were financially dependent on their husbands during the marriage. Only 24% involved a female main breadwinner. This structural imbalance means that, when the relationship ends, many women are starting from a weaker earnings base.

Asset Division Issues

Even when women secure the family home as part of a settlement — a common scenario where children are involved — this does not guarantee financial stability.
Why? Because a house is an illiquid asset: it can’t be used to pay day-to-day bills, and mortgage or upkeep costs can strain budgets.
Pensions, which are often larger in value than the equity in a home, are frequently overlooked in settlements. This oversight has a devastating long-term impact.

The Pension Blind Spot

L&G’s data shows that only 13% of divorcing couples consider pensions in their financial settlements, compared to around half who consider the family home. Nearly 28% of women waive any claim to their partner’s pension — almost twice the rate of men (17%).
 Given that women’s pensions at retirement are typically half the size of men’s, this choice can cement inequality for decades.

2. The “Hidden Costs” of Separation

Childcare and Career Sacrifices

After separation, one in five women returns to paid employment, but many face limits on earnings potential. L&G found women are twice as likely as men to reduce working hours after divorce to care for children, and more than twice as likely to struggle balancing work and childcare.

Lorna Shah, Managing Director of Retail Retirement at L&G, notes:

“Women are still far more likely to pick up the majority of childcare and broader caring responsibilities.”

Real-Life Strain: Annie Clarke’s Story

Annie Clarke, 60, shared that her ex-husband was the main breadwinner, while she fitted her bookkeeping work around caring for their three children. Post-divorce, she described being “permanently exhausted” from juggling night shifts and single parenting, often relying on friends to make ends meet. Her solicitor urged her to push harder in negotiations, but financial worry made the process overwhelming.

3. How the Law Views Asset Division

In England and Wales, divorce financial settlements aim for “fairness” — but fairness isn’t always equality. Courts look at factors like:

• Needs of each party
   
• Earning capacity
   
• Contributions (both financial and non-financial)
   
• Welfare of children

Key issue: Many couples negotiate without legal advice, leading to unequal deals. Ben Glassman of Evelyn Partners warns against simple swaps like “you take the pension, I take the house,” noting that pensions can provide far greater long-term income than property.

4. Why Pensions Matter More Than You Think

A Common Mistake

Two pensions worth £100,000 on paper may not be equal. For example:

• A Self-Invested Personal Pension (SIPP) is subject to market performance and withdrawal rates.
   
• An NHS pension may guarantee a far higher annual income due to its defined-benefit structure.
   

Without actuarial advice, many underestimate a pension’s true value.

The Gender Pension Gap

L&G’s own data in 2024 showed the gender pension gap starts at 21% early in women’s careers and barely changes over time. By retirement, women’s pension savings are 50% smaller than men’s, meaning post-divorce financial recovery is even harder.

5. The Administrative Reality of Divorce

The research also highlighted delays: in late 2024, the average time from filing to a final order in England and Wales was 70 weeks — up two weeks from the year before. This prolonged period can drain finances and delay closure.

6. Steps Women Can Take to Protect Their Financial Future

Get Full Financial Disclosure

Before agreeing to any settlement, insist on a Form E financial disclosure from both parties. This ensures all assets, pensions, savings, and debts are visible.

Don’t Ignore Pensions

• Request a Cash Equivalent Transfer Value (CETV) for all pensions.
   
• If unsure, hire an actuary to calculate the real value.
   

Consider Liquid vs. Illiquid Assets

A mortgage-free house may seem like security, but if you can’t cover daily costs, it may be wiser to sell or trade part of the equity for more liquid assets or pension rights.

Negotiate Childcare Costs

Factor in ongoing childcare and education expenses into the settlement to avoid future financial strain.

Plan for Employment

If you’ve been out of the workforce, consider re-skilling or part-time work options early in the separation process.

Seek Professional Advice Early

Financial advisers and family solicitors can help remove emotional bias from negotiations, ensuring decisions are made for long-term stability rather than short-term relief.

What This Means for the UK Legal Landscape

The L&G findings echo a 2023 University of Bristol study, which confirmed that women — particularly mothers — leave marriage in a weaker financial position. Many earn under £1,000 per month post-divorce, compared to just 10% of men.

With campaigners calling for pension sharing to be mandatory in settlements, there’s growing recognition that UK family law needs reform to protect economically vulnerable spouses.

Until that happens, awareness and early planning remain the best defences against the long shadow of the divorce gap.

Where to Get Help

If you’re going through a divorce or separation, you don’t have to face it alone. Legal and financial advice early in the process can dramatically change your long-term financial outlook.

Parachute Law’s divorce solicitors can:

• Review your proposed settlement for fairness
   
• Ensure pensions and other hidden assets are considered
   
• Advise on child arrangements and support
   
• Negotiate with your ex-partner or their solicitor on your behalf

Final Word

Divorce may feel like an emotional battle, but it’s also a financial negotiation with lifelong consequences. The difference between keeping or losing pension rights, negotiating childcare costs, or securing a fair share of marital assets can be the difference between comfort and hardship for decades to come.

As L&G’s research makes clear, without informed and assertive action, the “divorce gap” will keep setting women back long after the ink has dried on their decree absolute.

Contact Parachute Law Today

Call: 0207 183 4547
Email: thelegalteam@parachutelaw.co.uk

For more information on dividing assets upon divorce and financial settlements click on the link below:

Article:Who Gets What in a Divorce?

For more information on Pre-nuptial and Post-nuptial Agreements click on the links below:

Article:Prenuptial Agreement in the UK: Everything YOU Need to Know Before Saying I Do

Article:Prenuptial Agreements in the UK: A Comprehensive 2025 Guide

Article:Protect Your Future: Why a Pre.nup or Post.nup Could Be One of the Smartest Legal Steps You Take

Article:Pre-nups v Post-nups: what’s the Difference – and Why You Might Need One