Andrew: Rebuilding your financial future after divorce

Key facts:

• Andrew was in the middle of a divorce when he approached us having been recommended by a friend
• He was the sole earner and his wife looked after their children, but he spent a couple of nights a week with them
• Andrew had several pension schemes from previous employment
• He was concerned about ensuring the financial security of his children if he couldn’t work.
• He also wanted to buy a home for himself.

What did we do for Andrew?

We began by getting to know Andrew and establishing the kind of lifestyle he would like, both now and in retirement. He needed to understand the changes to his financial situation following his divorce, as well as how his income and assets would provide for him for the rest of his life.

His main concern was how the sharing of his pensions would negatively affect his retirement date.

The next step was to collect detailed information about his income, expenditure, assets and liabilities. He had three pensions from previous jobs but was not currently contributing to a pension.

We also discovered that he had no financial protection should he be unable to work.

With the information collected, we produced a cash flow model which analysed different scenarios and showed Andrew the effect of agreeing to the split of pensions requested by his soon to be ex-wife. This was followed up by a series of recommendations to make his financial plan work.

How did Andrew benefit from our financial advice?

An income protection policy was recommended to Andrew so that he would continue to receive an income if he wasn’t able to work. Furthermore, to ensure that his children were financially secure should he die at a relatively young age, we recommended he take out life cover, which would pay a lump sum to his children should he die.

We then helped Andrew to calculate a fair split of his pension benefits and understand what action he needed to take if he wanted to retire as planned.

We showed Andrew that this proposal was fair to both him and his wife and that he could, in fact, continue to live the life he wanted, both now and in retirement. By making new pension contributions, he wouldn’t run out of money.

He now has peace of mind; any unforeseen circumstances which would cause financial hardship to his children are covered, so is Andrew’s long-term future. He can move on to his new life post-divorce with a new-found confidence.