1. Don’t rush into any long term financial commitments - divorce almost invariably involves some changes in lifestyle due to changes in income and expenditure so don’t rush into any financial commitments or a radical change of lifestyle in the first few months after your divorce. Take you time to think about your new priorities.
2. While you are thinking about what to do, put any money from a lump sum settlement on deposit in an interest bearing account. Internet accounts pay better than most high street banks – checkout www.moneyfacts.co.uk that provide a list of competitive saving accounts. 
3. The longer term, ensure you have enough cash in an interest bearing account to cover short term spending, e.g. holidays, Christmas and emergencies. This will probably equal about 3-6 times the amount you normally spend in a month. Don’t keep much more than this on deposit as your money will not be working very hard for you. 
4. Invest wisely over the longer term - some people only sleep well at night if their money is ‘safe’ in a bank or building society account. But this type of saving is unlikely to protect the real value of your money against inflation in the long-term because the capital does not grow over the years and the income will not rise unless there is a change in interest rates, indeed, your income could fall. To get rising capital and income, you will need to consider an investment linked to real assets such as shares or property, which involve a degree of risk. 
5.  Pensions - women are handicapped in the struggle to build up a decent pension because career breaks can take 5 to 10 years out of their working life which means they can't make pension contributions. You need to think seriously about pension planning. 
   1.  if you have income from a job, think about making contributions to a pension; the longer you leave it, the more expensive it gets. If your employer has a company pension scheme, it will usually be best to join this. If not, you will need to start a personal or stakeholder pension plan. 
   2. If you are ‘under-pensioned’ and you belong to a company pension scheme, think about making additional voluntary contributions (AVCs) to boost your retirement income. 
   3. You can get an estimate of the your state pension entitlement by completing a BR19 form – this cab be obtained from the DWP website (www.dwp.gov.cuk). 
6. Insurance - if you have young children or other dependants, life assurance is a priority. You may also want to consider permanent health insurance (this provides you with an income if you fall ill and have to stop work), private health insurance (which covers the cost of private hospitalisation), critical illness insurance (which pays a cash sum if you get a major illness such as cancer or heart disease) and redundancy insurance. 
7. Tax - getting divorced will affect your tax position:
   1. if you have at least one child living with you who is under 16 or in full time education (including certain training schemes), you can claim the Additional Personal Allowance, though you may have to split it with your ex-husband. Unless you can agree the basis of the split between you, it will be divided in proportion to the time the children spend with each parent. 
   2. If you are employed, you should tell your tax office as soon as possible that you are claiming the allowance so that your tax code can be changed. This will prevent you from paying too much tax through the PAYE system. 
   3. Remember your maintenance payments are normally free of tax but you still need to disclose them on your tax return. 
8. Benefits – check and make sure that you claim any state benefits you maybe entitled to. These could include :
   1. Child benefit – this is not means tested and is paid for children under the age of 16 or 18 if still at school/college. 
   2. Child tax credit is paid through PAYE if you are in employment and have a household income of less than £58k pa. 
9. If your ex-husband is paying you maintenance, the payments would stop if he were to die. You can ensure that you will receive a lump sum which can be invested to replace the lost income, either by taking out a life assurance policy on him (in trust for you) or by ensuring there is a suitable provision in his will. Remember, wills are nullified by divorce so both of you will need to make new ones. Otherwise you will have to make a claim on his estate, which may not be successful, depending on his new commitments. 
10. Suggest to your ex-husband that he take out an income replacement policy. This ensures sufficient income to meet his maintenance commitments if he is off work for a long period of time due to sickness or disability. 
11. The majority of decisions you will face when getting divorced will be financial ones. Therefore, it is very important that you find a financial adviser whom you feel comfortable with, who will always work in your best interests and who will help you take charge of your money. So seek advice from a reputable independent financial adviser (IFA). Don’t be rushed into anything by ‘advisers’ phoning you up or chatting to you in the bank or building society. A good IFA will give you genuinely impartial advice and will help you balance your needs for cash now against what you will need in the future. There are a number of women IFAs now if you would feel more comfortable talking to a woman (see www.unbiased.co.uk for an IFA in your area). 

About Addidi Wealth
Addidi Wealth provide financial planning and independent financial advice as well as a range of wealth management services. It is regulated by the Financial Authority and can be contacted on info@addidiwealth.com or 0207 060 1200


This service is provided by Addidi Wealth Ltd who is authorised and regulated by the Financial Services Authority