New research from Legal & General (L&G) has revealed that a significant number of people who divorce fail to update key financial information—putting their families’ financial futures at risk.

According to the findings, one in ten divorcees (over 815,000 people) have forgotten to remove their former spouse as the beneficiary of their life insurance policy. As a result, if a claim were made, their ex-partner could still receive the full payout.

The survey, conducted by Opinium Research on behalf of L&G, highlights a wider trend of financial oversight following separation. Only 7% of people who had divorced discussed life insurance beneficiaries as part of their separation agreement, and just 27% had cancelled a joint life insurance policy held during their marriage.

The risks go beyond insurance. 11% of those surveyed admitted they had either delayed or forgotten to update their will, meaning their ex-spouse could legally inherit their estate—despite the relationship having ended.

LONG-TERM CONSEQUENCES

James Shattock, managing director, UK Protection at Legal & General, warned of the long-term consequences of such oversights.

He said: “Divorce is always difficult but, without advice, it can be costly too. It’s really important for anyone going through a separation to be fully aware of the financial implications of divorce and to ensure they review other important elements, like their wills and financial products like life insurance, to ensure beneficiary information is updated.”

The research also found that very few divorcees seek professional financial help. Just 7% consulted a financial adviser during their separation, leaving many vulnerable to avoidable errors.

NEW PROTECTION POLICIES

When it comes to new protection policies post-divorce, take-up is minimal. Only 4% of respondents took out a critical illness policy, and just 3% arranged income protection, despite the financial uncertainty that often follows separation.

Shattock emphasised the value of advice in navigating the complex financial changes triggered by divorce:

KEY ROLE

He added: “Advisers can play a key role in supporting clients during a separation, helping them to put a plan in place for the costs associated with a divorce, any shared debts and, potentially, making sure a Clean Break Order is in place.”

To support those going through divorce, L&G has created a financial health check tool aimed at helping individuals understand and manage the broader financial implications of a separation.

The findings are based on a survey of 2,945 UK adults who are divorced, conducted between 25 October and 12 November 2024.