While the rate at which Australians are getting married and divorced has dropped over the past two decades, 97,000 Australians are still calling it quits each year, with it often taking around five years for individuals to recover financially after going their separate ways.
We look at some of the findings from the latest AMP.NATSEM report – Divorce: For Richer, For Poorer, which looks at some of the financial consequences of divorce in Australia today.
National patterns of divorce
- Australians are separating later in life, with the median age of men and women getting a divorce 45.3 and 42.7 respectively
- Nearly half of all divorces each year involve children and of those, 43% involve children aged 15 years and under
- Despite the fact that one in three marriages in Australia is likely to end in divorce, a large number of divorcees go on to re-partner or remarry. For those who remarry, the negative financial impact of divorce is often reduced due to an increase in household income and shared expenses.
The impact of a marriage breakdown
According to AMP.NATSEM findings, the financial fallout of divorce can erode savings and assets.
It can also jeopardise the future ability for many to get back into home ownership, accumulate adequate super and provide desirable education outcomes for their children.
Here’s a look at some of the conclusions that came out of the study.
- Home ownership rates for divorcees with no dependent children dropped by 16% for women and 9% for men, largely through the sale of joint property
- It could be that many couples chose to sell the family home, as keeping up with home loan repayments on one income is often too difficult.
Employment, income and super
- Divorce had little impact on the employment status and income of men
- There was a 14% increase in the proportion of women returning to work, but their income was about 10% lower than women in the workforce who were married
- The average super balance of a divorced male was 28% less than the average married man, while super balances for divorced women were 75% less than those of married women.
Children and education outcomes
- Figures showed divorce could affect children’s long-term educational outcomes, with children of divorced families more likely to leave school earlier
- One in five adults aged 25 to 44, whose parents were divorced by the time they were 14, had left school before they completed high school.
Planning at the crossroads
While most families start to recover economically five years post-divorce, there remains a significant gap in the financial footing of divorced and married couples.
AMP.NATSEM report findings did however show that being financially prepared for a divorce could shave a year off the five-year recovery period.
This is why it’s a good idea for men and women who may be at the crossroads of divorce to evaluate their financial situation.
If you need advice, speak to your financial adviser or if you don’t have one, call us on 131 267 or use our find an adviser tool.