Parenting Through Divorce: Protecting Your Family’s Financial Future

Divorce brings lots of changes. If you are a parent, it is natural to worry about your children’s wellbeing. You might have questions about your own financial security, both now and in the years ahead during the upheaval.

Here are some of the main financial issues to consider as a parent going through divorce, and a few steps you can take to protect yourself and your children.

The Impact of Being a Stay-at-Home Parent

Many parents, especially those who have been the primary caregivers, find that divorce raises tough questions about finances. Taking time out of work to raise children can impact your career, earnings, and future pension. If this is you, you are not alone.

It is important to be honest about your needs and to ensure your contributions as a parent are recognised. The law allows for this. In many cases, the financial settlement can include maintenance payments for you as well as for the children. This is sometimes called spousal maintenance and is separate from child maintenance. It can help cover living costs, especially if you need time to retrain or return to work.

When dividing assets, do not forget about pensions. Pensions are often one of the biggest assets in a marriage, but they can be overlooked, especially if one person has spent years raising children instead of building up a pension pot. Make sure any financial settlement takes this into account, so you are not left at a disadvantage in later life.

Thinking About Your Future Earnings

If you have taken a career break or reduced your hours to care for your children, it is worth thinking about how you can rebuild your earning potential. You may want to consider training, flexible work arrangements, or support with childcare costs. The financial arrangements you agree on now can help bridge the gap while you get back on your feet.

We can help with understanding workplace benefits, especially if you’re deciding between a higher salary or a more extensive benefits package. They can help you plan for the future, not just for the immediate changes.

Reviewing Your Protection Insurance

During divorce, it is important to review your protection insurance, such as life insurance, critical illness cover, or income protection. Ask yourself: are you and your children still covered if something happens to you? If your insurance was set up through your ex-partner’s work or in both names, you may need to arrange new policies.

Life insurance can be especially important if you are receiving or paying maintenance. If something happened to the parent paying maintenance, would the children’s needs still be met? Some families choose to make life cover part of the divorce agreement, so everyone has peace of mind.

You can speak to your provider about splitting your life insurance so you have a policy each instead of a joint one. It’s a simple process and won’t involve medical underwriting. However, it’s not always the most cost-effective option and you should also think about the amount and term, you may need to replace it to get the right cover. If you explore replacing it we can review your existing cover and look at new policies. If it’s better to keep your existing cover, we’ll tell you.

Other Practical Steps

Check your will and any nominated beneficiaries on life insurance or pension policies, these may need updating. You might not want to wait until the divorce is finalised to review these.

·       Budget for your new circumstances and get help if you need it.

·       Get a state pension forecast to see if you need to make up any gaps in your National Insurance record, especially if you have had long periods at home with the children. If you do have any gaps, you’ve got six years to pay for any missing years. If you find out how much it is to catch up, you can include it as part of the divorce settlement.

·       Gather and organise your financial documents. Make sure you have copies of important documents such as payslips, bank statements, pension statements, and details of any insurance policies. Keeping these papers in one place will make it easier to understand your finances and share information with your solicitor or adviser. It can also help you feel more in control during what can be a stressful time.

Looking After Your Family’s Future

Going through a divorce as a parent can feel overwhelming, but with the right planning you can protect both your finances and your children’s future. Be open about your needs, ask for help, and take your time making big decisions. Remember, looking after yourself is part of looking after your children.

If you want support with any of these issues, from pensions to protection insurance, get in touch. We are here to help you make sense of it all and move forward with confidence.

Jamie Lowe- Chartered Financial Adviser and Director of True Self Wealth Ltd

Get in touch: 07469 712299 Jamie.Lowe@SJPP.co.uk

To find out more, visit www.truselfwealth.co.uk

To book an appointment, visit www.calendly.com/jamie-lowe-tsw

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