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Te Ara Ahunga Ora research leader Dr Jo Gamble says people don’t access the support they need to protect their retirement plans when dividing assets. (File photo)
A woman who agreed to a 50-50 split of their assets when leaving her husband of almost 30 years says she wouldn’t make the same decision now.
“At the time, 50-50 felt fair. The split felt quite generous of him given that I was the one who made the decision to leave,” she said.
“In hindsight, I probably should have gone for a little bit more. The division of household duties was more 70-30 and my career was on hold for a good decade to raise our son.
“He’s now earning really good money over in Australia, so for him the separation turned out to be a good thing financially. While my circumstances have changed for the worse.”
The woman, who Te Ara Ahunga Ora Retirement Commission was identifying only as Mia, was in her mid-50s when she initiated the split.
A recent survey by the commission found her desire to divide the relationship property “fairly” was common among older New Zealanders going through a separation.
But despite all their good intentions, one in three thought the outcome of their asset division was unfair in hindsight, and more than half said their circumstances were negatively affected by a separation.
Women were more affected than men, likely linked to the impact of women assuming a primary caregiver role, and then having reduced earning potential when they return to the workforce.
Te Ara Ahunga Ora research leader Dr Jo Gamble said the research highlighted the financial difficulties many New Zealanders faced at retirement following a shock like separation in later life.
“For New Zealanders who separate over 50, thinking about how assets are divided and the implication this will have on their retirement savings is incredibly important,” she says.
“Unfortunately, people don’t seem to access the support they need to protect their retirement plans from the negative impact of dividing up assets.”
The research revealed that 90% did not consider retirement when dividing financial assets at all, yet 66% of Kiwis reported having their retirement plans negatively affected by separation.
Gamble said few people included KiwiSaver in the relationship property asset pool, despite contributions made during the relationship being relationship property.
“The feedback suggests that KiwiSaver is often viewed separately from the joint assets, with couples believing it to be money they have earned as individuals and out of scope of the wider division of assets.
“Only 25% of people included KiwiSaver when dividing their assets but 65% took bank savings and other investments into account.”
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Two-thirds of Kiwis surveyed say their retirement plans were negatively affected by separation. (File photo)
In Mia’s case, the separation was relatively amicable and landed on a 50-50 split of assets, including KiwiSaver.
However, finding well-paid work had been a challenge and, despite now being employed full-time as an event coordinator, she had been struggling financially and relying on savings to cover expenses.
While she valued her independence, she was worried about her financial security in retirement.
The survey also found most people (57%) determined the value of their relationship property without formal advice, leaving them vulnerable to emotionally driven decision-making.
Those who chose not to get advice – often because of the cost – were even less likely to consider KiwiSaver as part of their relationship pool.
However, respondents also equated coming to an informal agreement with being more reasonable or amicable.
