It takes divorcees five years to recover their finances

New report reveals it takes divorcees five years to regain control of finances.

Divorce doesn’t just take an emotional toll on families – it also leaves couples in financial turmoil. And a new report reveals it takes Australian divorcees at least five years to get back on their feet.

Yesterday, AMP released the findings of its 39th AMP/NATSEM report, Divorce in Australia: For Richer, For Poorer. The report looked at the lasting financial effects of divorce and reveals that as well as taking divorced couples five years to regain their financial footing, it also has serious consequences for living standards and retirement income later in life. 

Data from the National Centre for Social and Economic Modelling shows that one in three marriages end in divorce, costing Australians $14 billion in 2014. Complicated divorces don’t just hit the wallet hard, they also make future home ownership extremely difficult, tend to sap superannuation savings and influence education outcomes for children.

AMP Chief Customer Officer Paul Sainsbury says that divorce comes as a massive hit to those who don’t see it coming.

“Understandably, most couples don’t plan for divorce. This lack of planning, combined with the significant disruption and emotional stress 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 impacts can be considerable,” he says.

The report found that even five years after a divorce, home ownership remained out of reach for many divorced people, particularly parents. Single mothers were found to be hit the hardest by financial issues, with 40 per cent of divorced mothers still living in rental accommodation five years after a marriage breakdown. This is compared to 32 per cent of divorced fathers. Home ownership rates were 15 per cent lower overall for divorced couples.

The report details how newly-divorced mothers spend about 66.4 per cent of their household budget on basic but important items, such as groceries, clothing and household bills. Meanwhile, married mothers and fathers spend about 54 per cent of their household budget on these items.

Key findings of the 39th AMP/NATSEM:

  • Divorced parents aged between 45–64 years of age have 25 per cent fewer assets than those who are still married.
  • Divorced fathers aged between 45–64 years of age have 60 per cent less super than married fathers five years after a marriage breakdown.
  • Super balances for divorced mothers are 68 per cent lower than those of married mothers. On average a divorced mother has 37 per cent less super than a divorced father.
  • More than 20 per cent of newly-divorced mothers struggle to afford basic items for children, including school uniforms and leisure activities.

When it comes to influencing education outcomes for children, Professor Laurie Brown says the effects of divorce can seriously derail a child’s education.

“A family breakdown decreased a child’s chance of getting a university education by 6 per cent,” she said.

Have you experienced similar struggles when it comes to surviving a divorce? What services do you think should be available to assist divorced couples?





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    14th Dec 2016
    At this late stage of my life, I'm pretty sure I'd put up with Jack the Ripper to keep my simple but comfy home on a beautiful patch of the Queensland bush. Hope Jack feels the same. ????
    14th Dec 2016
    If Jack was with you would your house still be a "comfy home"?
    14th Dec 2016
    CSA kills any hope of getting back to a even heel??
    14th Dec 2016
    It certainly does with the older parent...... virtually no hope of re-building from zero.

    Another neo-Fascist imposition by bad government, this time in the shape of Juan Huarte, once prime minister in ElGrando Republica da San Austrador - a banana republic in which the government (senors/senoritas) is run by the rich for their benefit, and even goes as far as removing billions of dollars from the treasury and parking it in an overseas location for their benefit........ (it's called The Futures Fund, and in some Central American dictatorship it would be called theft from the nation).....

    I copped divorce - sold my pre-existing home before the marriage, set my ex and kids up in security for life, set out to re-build with 10% of the proceeds for myself - and was ambushed by that little rat John Howard and his filthy neo-Fascist CSA - who just laughed it all off as 'property settlement' and please pay up NOW, even when the ex made several times what I was earning.

    Even lost a girlfriend after that who said I'd been stupid and given it all away for my kid's sake - so that little rat and his NAZIs could get to chew on what was left of my life.

    When I receive my apology from that little rat and his Gestapo, I might forgive - but only after compensation is provided in full.

    Until then - Wee Johnnie and all like you - I remain Her Majesty's True and Loyal and ONLY Real Opposition.
    17th Dec 2018
    And if your ex has another baby with another guy, while your children are under a certain age, you are charged extra child support......and the extra isn't for your child. I know of 2 cases where this has happened.
    14th Dec 2016
    I had a late life divorce and have never recovered. I now am an expat living overseas on a pension, but I have a happier life, so not all in vain.
    14th Dec 2016
    Thought about it (waylaid by being carer for my ex) - a nice little lass in Thailand running a business you can fund to start, and with no income to affect pension rights....

    I had an Army mate who went to Cambodia for reconstruction, and he teamed up with a local lass who worked in a bank, gave her half his sustenance money, she invested it and split it 50/50 between him and her family while he lived rent-free at their home. He was investigated under suspicion of operating on the black market... making too much profit.....

    14th Dec 2016
    How true - not only divorce - my husband went through divorce and married me - I am twelve years younger and am still working - not earning a lot - we have two mortgages and he is 69 and was made redundant this year - he cannot apply for any of the pension and cannot get any financial support other than what is has in super (again not a lot) plus he has major health issues - on dialysis - yet so many get away with rigging the system yet others pay their way all their lives.
    14th Dec 2016
    Doesn't sound too rosey.

    Obviously enough conditions can change and there is little point with putting up with a situation you detest but...If there is a moral it must be, if you make an agreement, any agreement it is a solemn, vital undertaking, marriage is no less, you need to understand what it means, intend to honour it and work to maintain it.

    If you do not care to make that undertaking, that is, honour your agreement, don't get married. It doesn't have to be a constant swept off your feet thing, a life of luxury or without mishap to be valuable. And it can need devoted input to make it valuable.

    We expect too much, respect too little; we don't take our word to be our bond and we give a major impact on our lives too little forethought.

    14th Dec 2016
    Yes - amazing how being booted around by divorces, piss-poor attitudes and performance of managers and such, bad government policies that have lead to endemic unemployment, the current rape of Australia with 'privatisation' and offshoring jobs and businesses, health issues that increase in the over 45s.... and so on and so on - will inevitably lead this nation to:-

    1. Massive reliance on Pension to survive in old age (and massive unempoyment benefits along the way leading to the same thing)

    2. The calculated abolition of The Pension by self-serving and over-fed 'government' here, and the creation of a sick, ailing and starving older population, which wil sow the seeds for :-

    a. the development of a massive 'underworld', criminal and otherwise, as the only means of survival

    b. the long-awaited revolt of the ordinary people.

    It is an absolute disgrace the way 'politically correct' social engineering as per families and 'rights' of some over others, and all the other things thrown at the ordinary person over the past forty years - has lead us to this point.... and it an absolute disgrace the way ordinary people in the older working group and onwards are being and have been treated now for decades by employers and courts and governments.

    Bring On The Revolution!
    Not Amused
    14th Dec 2016
    I know quite a few young(er) people who slaved away at uni, built some assets before age 35, and refuse to get into a domestic relationship for fear of getting "cleaned out". A so-called "partner" (oftentimes an asset-poor gold-digger) only has to reside under the same roof for 2 years and can claim half of everything someone else has earned and saved. That's the law and it's wrong, wrong, wrong. My advice for those who want security in old age is when in doubt - don't.
    14th Dec 2016
    That is not the law! Whilst a 2 year domestic relationship entitles a person to seek a family law property settlement, it does not entitle them to "claim half of everything". That is just nonsense. A 30 year relationship, possibly yes, not a 2 year relationship. The trick to avoid being "cleaned out" is to marry someone or live with someone who has the same drive as you, who has also built up assets, also slaved away at uni or their career. If you are 50 and have built up assets and you meet someone of a similar age with no assets, definitely run a mile, regardless of how charming they are :)
    14th Dec 2016
    I am not sure but keep hearing the same thing Not Amused, although I have heard a period of 12 months tossed about.
    It is incredible that the laws of the land do not favour those who have in many cases worked long and hard to accumulate assets. I understand why young folk do not want to be married and do not live with a partner. A lot is lost in that type of life but likely wealth is not squirrelled away.
    14th Dec 2016
    I am not familiar with family law Mascot so can't comment on whether your view is the whole story, there is one fairly obvious variation you dont include though. That is where only one partner produces external income. A divorce in that situation no matter what the proportion of the entitlement will mean that the pie is less than the combined one. Fees will ensure that is the case even if one is unemotional enough to have no earning downtime.
    17th Dec 2018
    That now includes super. which didn't apply in the early 80s. Divorce proceedings were pushed through by men before the got the super pay-outs so it was included in settlement.
    14th Dec 2016
    Stands to reason if the joint property of a marriage is looked at as a pie, however you carve up the pie each person is going to take away less than what they previously had, joint ownership of the whole pie. If they remarry they can add their portion of the pie to their new partner's pie. If they stay single, they face the same hardships as any single person working to buy property or pay a mortgage with only one wage. If you choose to have children that is at least an 18 year commitment, financially if not physically, and so it should be. No study needed to state the obvious.
    Nan Norma
    14th Dec 2016
    Mascot. Absolutely correct.

    14th Dec 2016
    I, too, have been down that road and there always seems to be someone who is worse off, but as a friend of mine said, "I wouldn't want to be the one at the end of the line".
    14th Dec 2016
    It ain't rocket science. Of course people will have less if they split their assets. Maybe heed the old saying 'pick your partner carefully' and 'act in haste repent in leisure'.
    Welcome to the people business. No fun at the best of times.
    14th Dec 2016
    "Marry for money and you will end up paying for every cent of it".
    "She got the mine, I got the shaft".
    Old Dog
    14th Dec 2016
    3 divorces( you would think that I would learn) and a bit of a soft spot or perhaps soft head and I am now pretty much financially screwed. I have a roof over my head, thanks to a cousin but otherwise it would be very hard financially. The aged pension keeps me going.
    14th Dec 2016
    Geez - no good flirtin' with you then Old Dog? :-)

    Not taking the p..s - been there - done that - say no more! Erkkkk

    14th Dec 2016
    We have been married for nearly 50 years and, at this stage, no divorce proceedings are imminent. We work every day to keep our marriage strong because we don't believe that it just happens, it has to be worked on.

    Having said that I must say that I am saddened when I hear of friends who have become separated and have to start all over. I used to work in the finance industry and as nearly everybody has money somewhere, there will be the inevitable splitting of assets. It was never easy dealing with those who were divorcing but I can only imagine how much more difficult it is for those directly affected, not sitting on the sidelines like I was.

    To all of those who post here with stories of divorce, you have my deepest sympathy. Whatever you choose to post I will accept without comment as I have never been in the same position and therefore have no right to make a comment. I hope your lives are enriched in other ways, God bless.
    Chris G
    14th Dec 2016
    Mascot, you are incorrect. I have sadly been down this road in recent times.
    2 years max, and the partner is entitled to half. So not fair!
    I qualify this by saying that I am female, and I am the major stake holder in this deal.
    15th Dec 2016
    Assets are commonly secretly liquidated and hidden away when one partner is considering divorce. Often too late to recoup according to lawyers - 'One can only expect a fair 50/50 settlement of traceable assets/cash.' Hence it is imperative that both parties keep informed of all banking and jointly own all shares, realestate and any and all other investments throughout the marriage/partnership. This would help in the event a spouse tried to sell off assets prior to announcing their intention to divorce.

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