The latest AMP.NATSEM report has revealed that it takes five years for divorced couples to recover their financial position after separating. Since currently one in three Australian marriages ends in divorce, these negative consequences are a possibility for a third of our married friends. It's not pretty.
The report - For Richer, For Poorer: Divorce in Australia - offers insights into the economic fallout of divorce.
Divorce can seriously deplete or annihilate savings and assets, but can cause future problems for people trying to buy another home, accumulate retirement savings, or send their kids to good schools or university. We don't plan for divorce (our good-faith natures forbid it), and therefore are often not prepared financially for the eventuality. Couple this with emotional pain, and we have a mishandled financial situation on our hands.
Most people are marrying later, which means divorcing later too - we're getting divorced in our mid-forties, which are our prime earning and asset-collecting years, so when we talk in halves, it actually means something.
Key findings of the report include:
- Parents who divorce between the ages of 45-64 have 25 per cent less assets than their married counterparts
- The superannuation balances of divorced mothers are 68 per cent lower than married mothers, and a divorced mother has 37 per cent less superannuation than a divorced father
- A divorced father aged between 45-64 has 60 per cent less superannuation than married fathers five years after a marriage breakdown
- Over 20 per cent of newly-divorced mothers are struggling to afford basic items like school uniforms for the kids
- Five years after a marriage breakdown, 40 per cent of divorced mothers and 32 per cent of divorced fathers still live in rented accommodation
- Home ownership rates are 15 per cent lower for divorced couples compared to married couples
- A divorce reduces a child's chance of a university education by six per cent
- Fourteen per cent of divorced women return to the workforce, but they get paid 10 per cent less than working married women
- A divorce has no real impact on the employment status of men, with the income of a divorced father 26 per cent higher than the income of a married father
- Tasmania has the most divorcées in Australia, closely followed by Queensland, with Victoria and NSW having the lowest number