Divorce leaves both partners financially worse off
AAP News
12:58:020 5/04/2005
MELBOURNE, April 5 AAP - Divorce leaves both partners in a
marriage financially worse off, but women are likely to experience
the biggest fall in disposable income, according to a new report.
The joint report from financial services group AMP Life Ltd and
Canberra University's National Centre for Social and Economic
Modelling (NATSEM) says divorce not only immediately impacts
lifestyle and disposable income but can also profoundly affect
long-term accumulation of wealth.
"From a financial perspective, no one wins from divorce," AMP
Financial Services managing director Craig Dunn said.
One in five marriages ends in divorce within 10 years and more
than one third fail within 20 years.
The report, The Financial Impact of Divorce in Australia,
revealed that divorce has different consequences for men and women.
NATSEM director Professor Anne Harding said that for couples
separated for one year, the average man's household disposable
income fell by eight per cent or $4,100 per annum while the woman's
income dropped 42 per cent or $21,400 per annum.
Women's finances suffered even more when taking into account
that they were more likely to have to support children after the
separation.
In comparison, couples that remained married were likely to
increase their overall household income by an average of $2,500 or
3.9 per cent a year.
Divorcees were also less wealthy. Those who had divorced in the
past 10 years and who were still single or sole parents had half
the wealth of divorcees of the same age who had new partners.
Divorced women initially tended to have more assets because they
often received the family home but had less cash which meant they
struggled to meet daily costs.
Divorced men, who were more likely not to have responsibility
for children, would take on more debt because they had left the
family home.
Women who were divorced faced a bleak retirement because they
had low incomes and very little in the way of superannuation or
other investments.
The average sole parent's superannuation was only one-quarter
that of single-person households and one sixth that of couple
households.
The report said men were more likely than women to enter into a
new relationship after divorce. Over the last 10 years, 50 per cent
of men were in a new relationship compared to only 35 per cent of
women.
Divorced men were more likely to live without children, whether
they remained single or entered into a new relationship.
But two out of three divorced women were in households with
children either as the sole parent or as a parent in a new
relationship.
AAP tsc/eb
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