3 ways a financial expert can empower your female clients after divorce

Discover three important ways a financial expert can empower your female clients after their divorce is finalised by helping them take control of their wealth.

Following a divorce, your female clients might face new financial challenges and responsibilities. If they’re used to planning as a couple, making financial decisions on their own could feel daunting.

According to research by Legal & General (7 February 2024), 24% of women struggle financially post-divorce, compared to just 18% of men. Additionally, 21% of women versus only 13% of men worry about meeting essential costs.

A financial expert could play a key role in helping your divorced female clients overcome such obstacles and concerns.

Indeed, according to the most recent consumer study by the Chartered Institute of Securities & Investment  and Financial Planning Standards Board (2023), people who seek professional financial advice have a better quality of life and more financial confidence.

Read on to discover three important ways a financial expert can empower your female clients after their divorce is finalised.

1. Supporting them to buy a new home with confidence

Buying a new home could be one of your clients’ most significant purchases after they get divorced. This may feel like a huge undertaking, and there’s a lot to consider before making a commitment.

Your clients may benefit from discussing their priorities and goals with a financial expert, who can then help them understand how buying a property might fit into their financial plan.

This might include:

• Helping your clients decide what level of financial risk they feel comfortable taking on
• Calculating how much your clients can afford to pay for a property
• Budgeting for ongoing costs such as mortgage repayments and utility bills
• Exploring different types of financial protection, such as life insurance and income protection
• Discussing options for raising the funds needed and the implications of doing so.

A financial expert can also use cashflow modelling to show your clients how they might manage their repayments and running costs if their circumstances change, for example, if they have a drop in income or take a career break to care for their family.

If you have divorced female clients who are buying a property on their own for the first time, they may feel apprehensive about parting with a large sum of money. This may be especially true if you have a client whose divorce settlement did not include ongoing financial support from their ex-spouse.

Sound advice and reassurance could provide the vital support your divorced female clients need to realise their goals and feel confident about the long-term affordability of their choices.

2. Helping them plan for their retirement as a single person

Your divorced clients might have planned their retirement alongside their ex-spouse or civil partner, based on their financial situation as a couple.

Unfortunately, while couples usually need to save more overall for their combined retirement, individually they’ll need to save less than a single person would to achieve the same standard of living.

Figures published by the Pensions and Lifetime Savings Association’s (PLSA; 12 February 2024) show that a single person needs an extra £257,000 for a “comfortable” retirement, compared to someone in a couple.

What’s more, women typically live longer than men. According to the Office for National Statistics life expectancy calculator, a 50-year-old man has an average life expectancy of 84 years, and a 1 in 4 chance of living to 93. Whereas a woman of the same age may expect to live to 87 years on average, with a 1 in 4 chance of living to 95.

So, a single woman may need to save more for their retirement than a single man.

As such, your divorced female clients may need to adapt any retirement plans they might have made when they were married.

A financial expert can provide invaluable retirement planning support tailored to your clients’ individual needs as a divorced woman.

For example, using cashflow modelling to project future income needs, a financial expert can show your clients whether they’re on track to achieve the retirement lifestyle they desire. They can then help them explore their options if it looks like there may be a shortfall. These might include increasing their pension contributions or building a strong investment portfolio.

Read more: Why you may need to save more for your retirement if you’re single

3. Providing guidance on estate planning without spousal input

Estate planning alone could be daunting, especially if your clients are used to sharing such tasks with their spouses.

Additionally, divorced women may have unique estate planning needs that they may not have encountered when they were married.

For example, women may be more likely to inherit wealth due in part, to their longer average lifespan. As such, Inheritance Tax planning might be especially important for your female clients. Their longevity could also mean that women need to save more for potential healthcare costs in later life than men.

Yet, the gender pay and pension gaps could mean they find it harder to build this wealth over their lifetime.

A financial expert can help your female divorced clients review and adapt their plans in line with their new circumstances. This might include updating their will or writing a new one, setting up a new Lasting Power of Attorney for health and finance, and planning how to pass on their wealth tax-efficiently.

When dealing with such a sensitive and complex issue as estate planning, working with a financial expert who your clients trust could help them plan for the future they deserve.

According to Professional Adviser (8 March 2024), more than two-thirds of women prefer female financial advisers. Yet women are underrepresented in the profession.

As a female financial expert who specialises in divorce, I can provide the bespoke support your female divorced clients need to feel empowered and in control of their wealth.

Read more: Divorced women may have unique estate planning needs. Here’s why 

Get in touch

If you have female divorced clients who could benefit from working with an empathetic financial expert, please contact me at lottie@truefinancialdesign.co.uk or call 07824 554288.

I am also happy to discuss cases with solicitors first, before you refer your clients to me, or you can contact me by email and CC your client accordingly. I am happy to accommodate whatever mode of communication works best for you and your clients.

Please note 

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, Lasting Powers of Attorney, or will writing.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.