Two-thirds of divorced retirees rely on state pension for main income

New research* from interactive investor, the UK’s second-largest investment platform for private investors, reveals the long-term financial impact of divorce, even into retirement.

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Key facts

• 66% of retired divorcees rely on the state pension to provide their main income in retirement, compared with 45% of married retirees and 54% of single people
• Just 25% of divorcees expect more than £100,000 in their pension by retirement, compared with 52% of married people
• 37% of retired divorcees have moved home during retirement, compared with 29% of married retirees
• 23% of married people (both non-retirees and retirees) have given a financial gift to their family in the last three years, compared with 13% of divorcees.

Craig Rickman, personal finance and pensions expert, interactive investor, says: “Getting divorced can cast a long financial shadow, even into later life. Although it’s possible to rebuild wealth after a divorce, getting back on the housing ladder or beefing up a pension can be tough, particularly for single parents.

“As our research shows, the future impact of divorce can be significant. Divorcees are more likely than married and single people to rely on the state pension as their main source of retirement income and only a quarter of divorcees expect to accrue six-figure pension wealth by the time they reach later life.

“The unfortunate reality is that many individuals don’t get a fair outcome during divorce negotiations. It’s a perfect storm because they are often under immense emotional and financial strain, at a time when decisions and outcomes could affect their finances for years to come.”

Five steps to protect your finances whatever your relationship status

1) Be open about money with your partner

“If you’re in a relationship, being open about money with your partner from the beginning is essential. Not only does it help to avoid any awkward chats down the line, but knowing how much you both earn, spend, save and invest means you can plan your future with greater certainty. It’s worth talking in advance about big money decisions like starting a family, buying a home together or changing careers. In the unfortunate event you do split up, you’ll be in a stronger position to make sure you divide your assets fairly.” 

2) Understand your finances

“Keeping on top of your financial affairs is vital, whatever your relationship status. Take half an hour to tot up your assets including savings, current and previous workplace pensions, and any investments. Don’t forget that if your pension savings are invested in the stock market, which most defined contribution (DC) plans typically are, they will benefit from investment compounding over time. Although returns aren’t guaranteed, in the long run investing tends to grow your money faster than inflation and may also outpace property prices.”

3) Don’t forget pensions

“Pensions are some people’s most valuable asset, often worth hundreds of thousands of pounds. Yet many couples focus on who keeps the house during a divorce, with pensions falling down the pecking order. Compared to the house, pensions can seem like a boring and complex pile of paperwork. But not understanding the value of your partner’s pension could mean you lose out, leaving you financially vulnerable in retirement. Instead, a pension-sharing agreement, where the pension savings are divvied up between the two of you, is worth considering as it might be a fairer solution.”

4) Keep building wealth for the long term

“If you’re going through a divorce, you may feel like you’re starting from scratch with your finances. That’s why it’s important to sit down, take stock of your changing circumstances and work out what you can do to improve your future wealth. 

“Making small and regular steps can be easier than a dramatic overhaul and the long-term impact can be just as effective. For example, investing just £50 each month could grow to £7,700 in 10 years, assuming 5% annual investment growth net of fees.

“Tasks like creating a budget, increasing your savings or investing regularly can transform your finances over time, especially if you review and fine tune your affairs at frequent intervals.”

*A note about the research sample: we spoke to 9,000 people across the UK, using award-winning consultancy Opinium Research between 13 February 2025 and 29 April 2025 to find out more about their retirement plans, financial worries and finances. The sample is split into two – 5,000 are representative of the whole UK population and these results make up the bulk of the report (weighted to be nationally representative, based on age, gender, region and ethnicity). The remaining 4,000 are from our interactive investor community (both customers and highly engaged newsletter subscribers) who are largely experienced investors and tend to be wealthier on average. See the full research in our Great British Retirement Survey.