When love Dies

WIVES really are the big losers from divorce - to the tune of $21,000 a year.

New figures show a woman's disposable income drops by an average 42 per cent, or $21,000, in the year of separation.

Men lose out too, but only by an average of 8 per cent, or $4100, while couples who stay married are likely to increase their household income by an average $2500 a year.

A study of the financial impact of separation on men and women, by AMP Life and the National Centre for Social and Economic Modelling, reveals the disparity between divorcing men and women is even starker once the number of people supported by a household's income is taken into account.

After separation a man's (needs-adjusted) income goes up because the average man tends to live without children in the year following separation.The converse is true for a woman, because she still has mouths to feed.

The Financial Impact of Divorce in Australia found women accounted for about 80per cent of sole-parent families. With less labour force experience and little, if any, superannuation savings, the prospects of a single mother working her way out of financial difficulty and into a secure retirement can be bleak.

On average, sole parents have 25 per cent of the superannuation of single-person households and one-sixth that of couple households.

Using data collected since 2001 from annual interviews with 8000 Australians, NATSEM, based at the University of Canberra, found divorced women tend to have more assets, because they are often awarded the family home in a settlement, but less cash. Divorced men have much higher debt levels, but higher superannuation and higher incomes.

But for both men and women, the best prospect for rebuilding wealth lost in a divorce lies in embracing the adage "If at first you don't succeed, try, try again".

Those who find a new partner can look forward to doubling their household income, although they face a higher risk of divorce the second time around.

Men have been quick to learn that lesson. More than 50per cent of Australian men who divorced in the past 10 years have formed new relationships, compared with 35per cent of women.

But AMP financial services manager Craig Dunn said the report proved divorce was disastrous for both men and women. With about half of today's marriages doomed to fail, people needed to plan for life after divorce.