New analysis has shown that private pension wealth is the biggest component of household wealth in the UK, and has highlighted how important it is that this wealth is separated fairly in the event of divorce for the future financial well-being of both parties.
The analysis by Aviva follows the latest statistical release on divorce in England and Wales from the Office for National Statistics, which revealed that although the overall number of divorces has fallen, the average age of divorce has reached an all-time high at 45 years and 11 months for men and 43 years and six months for women. For both sexes, the average age of divorce has been rising by about three months every year over the past decade.
According to Aviva, the UK holds a massive £11.1 trillion pounds in household wealth. Private pensions represent the biggest single component of this wealth – at about 40% of the £11.1 trillion total.
Aviva estimates that a typical couple could have about £120,000 in combined private pension assets if they were to divorce in their 50s, assuming they married when aged 30.
“It is typical for our wealth to grow as we age,” commented Alistair McQueen, Head of Savings & Retirement at Aviva. “A rising average age of divorce will therefore typically bring with it a larger pool of wealth to separate. With the average age of divorce at an all-time high, it is fair to assume levels of wealth at a time of divorce may also be at an all-time high.”
“With the average age of divorce higher than ever, agreeing a fair separation of pension assets is more important than ever,” he added.
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