April 08, 2005
Women Divorces Biggest Losers
[These figures are similar to other figures about the drop in standard of living for divorce. For any trolls who are itching to bring up Lenore Weitzman, don't bother. Her 73% drop in income figure had long ago been corrected, and the various corrections came to a similar figure - 40%.]
Tuesday, 05 April, 2005
MELBOURNE, April 5 AAP - Divorce leaves both partners in a marriage financially worse off, but women are likely to experience the biggest fall in disposable income, according to a new report.
The joint report from financial services group AMP Life Ltd and Canberra University's National Centre for Social and Economic Modelling (NATSEM) says divorce not only immediately impacts lifestyle and disposable income but can also profoundly affect long-term accumulation of wealth.
"From a financial perspective, no one wins from divorce," AMP Financial Services managing director Craig Dunn said.
One in five marriages ends in divorce within 10 years and more than one third fail within 20 years.
The report, The Financial Impact of Divorce in Australia, revealed that divorce has different consequences for men and women.
NATSEM director Professor Anne Harding said that for couples separated for one year, the average man's household disposable income fell by eight per cent or $4,100 per annum while the woman's income dropped 42 per cent or $21,400 per annum.
Women's finances suffered even more when taking into account that they were more likely to have to support children after the separation.
In comparison, couples that remained married were likely to increase their overall household income by an average of $2,500 or 3.9 per cent a year.
Divorcees were also less wealthy. Those who had divorced in the past 10 years and who were still single or sole parents had half the wealth of divorcees of the same age who had new partners.
Divorced women initially tended to have more assets because they often received the family home but had less cash which meant they struggled to meet daily costs.
Divorced men, who were more likely not to have responsibility for children, would take on more debt because they had left the family home.
Women who were divorced faced a bleak retirement because they had low incomes and very little in the way of superannuation or other investments.
The average sole parent's superannuation was only one-quarter that of single-person households and one sixth that of couple households.
The report said men were more likely than women to enter into a new relationship after divorce. Over the last 10 years, 50 per cent of men were in a new relationship compared to only 35 per cent of women.
Divorced men were more likely to live without children, whether they remained single or entered into a new relationship.
But two out of three divorced women were in households with children either as the sole parent or as a parent in a new relationship.
Posted on April 8, 2005 at 08:51 AM | Permalink