New research from Australia has revealed that it can take up to five years for divorced couples to recover their financial position following separation.
According to the study, by AMP.NATSEM, divorce not only decimates savings and assets but threatens the ability for many to get back into home ownership, accumulate adequate superannuation and provide desired education outcomes for their children.
"Understandably, most couples don't plan for divorce,” commented AMP Chief Customer Officer Paul Sainsbury. "This lack of planning, combined with the significant disruption and emotional distress of a divorce, often means finances are a lower priority and mishandled during a separation.”
"And with Australians now tending to divorce later during our mid 40s and prime wealth-accumulating years – the long-term financial impacts can be considerable," he added.
Key findings from the report include:
- Divorced parents aged between 45-64 years of age have 25% less assets than their married counterparts.
- Superannuation balances for divorced mothers are 68% lower than married mothers, while on average a divorced mother has 37% less super than a divorced father.
- Divorced fathers aged between 45-64 still have 60% less superannuation than married fathers five years after a marriage breakdown.
- More than 20% of newly-divorced mothers are struggling to afford basic items including school uniforms and leisure activities.
In addition, homeownership remained out of reach for many divorced parents. Five years after a marriage breakdown, 40% of divorced mothers and 32% of divorced fathers still live in rental accommodation.
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