Written by Jennifer Williamson
Media attention around the menopause has increased over the last few years, particularly due to household names demanding greater support and encouraging the media to help raise more awareness.
More recently, Davina McCall’s documentary (Sex, Mind and the Menopause) opened up conversations and busted myths about the menopause transition, as well as potentially having prompted a huge increase in the number of people seeking hormone replacement therapy (HRT).
For many, this has normalised concerns about the feeling of losing it and general cognitive decline. Despite this, significant numbers of people continue to experience menopausal symptoms without recognising them as such.
In the last few years, for the first time, the Office for National Statistics (ONS) reported that the mean age of women at divorce has crept up to 45.3, which coincides with the generally accepted start of menopause.
Dealing with relationship change and menopause simultaneously is not new. We do not know, however, what impact this may have had on how, historically, such clients were advised, how they handled the proceedings, the outcomes which were achieved or agreed and whether those outcomes stood the test of time in terms of meeting needs. It is possible that many of these clients may have settled for financial outcomes on the lower side of what is ‘fair’ and meets their needs.
Now that the average age of a woman divorcing has entered the ‘menopause zone’, it’s more important than ever that we really understand how these two events interrelate. This will enable us all to better support our clients to achieve the financial outcomes they deserve, and their need to start afresh.
At the onset of the menopause, around 45 years, individuals could well be simultaneously:
• Caring for primary school age children and either reaching the end of a family related work or career break or juggling their family’s ever increasing and complicated timetables, while continuing to deliver results in demanding careers.
• Considering a gear shift in terms of work, to re-ignite their career or consider promotion to a senior level.
• Starting to assume greater care responsibilities for parents or in-laws, who may be tending towards less active/healthy retirement years.
• Starting to experience the onset or increase of physical and / or psychological menopause symptoms, such as sleep deprivation, brain fog, and difficulty concentrating.
In later life, those who have gone through menopause are statistically twice as likely as being diagnosed with Alzheimer’s and other forms of dementia than those people who have not gone through menopause. Consequently, diagnosis or symptoms can often have financial implications in terms of the cost of end of life care needs.
What this means for legal and financial advisers alike
The challenge of any relationship change will be in addition to all of the above matters with which menopausal clients may already be dealing. This is why IFAs and lawyers alike need to understand how any particular client is faring.
We should balance this need with sensitivity, as menopause is a natural biological life stage, and different people will experience varying symptoms and have individual views about discussing this with professional advisers, and we should consider whether a person going through the menopause would want ‘different treatment’.
In particular, many clients may be unaware, or may not acknowledge that they are experiencing menopausal symptoms which they may dismiss as tiredness and exhaustion from the daily juggle, or the anxiety of a failing relationship. We need to appropriately encourage such clients to be open about their symptoms, so we can support them by signposting to the various resources available and GPs specialising in the menopause.
Simultaneously dealing with this number of competing, and arguably equally important, factors can make our clients vulnerable. For example, menopausal symptoms, and lack of confidence, could all contribute to people agreeing potentially detrimental financial terms, or they may find it more challenging to understand relatively complicated legal and financial advice. Perhaps, therefore, the greatest significance of menopause relates to how we care for these clients.
There are regulatory rules for both legal advisers and IFAs about how to look after vulnerable clients – such as advice from the Financial Conduct Authority – including the requirement to provide information in a way that clients can understand, considering their personal circumstances and any particular vulnerability.
In the same way that we would not hesitate to advise other vulnerable clients to bring a trusted friend or family member to meetings with them, this advice may be just as pertinent and relevant to a menopausal client. In addition, due care and attention should be given to what is the right environment in which to conduct meetings – including considering temperature, lighting and easy access to toilet facilities. Similarly, long and verbose correspondence should be avoided more than ever.
There are several key financial claims which family lawyers address with their clients, and often discuss with their financial advisers:
• Capital: The starting point is often equal division of whatever capital exists. Arguments for unequal division include compensating a person for relationship generated disadvantage (e.g. sacrificing career to assume childcare responsibilities.) It is possible that menopausal feelings of anxiety may impact on, or drive, a wish to retain the family home, almost at any cost. We frequently see pension entitlement being offset to achieve this, and such offsetting can be to the client’s significant financial detriment.
• Pension: This can be a considerably more complex area than capital. Depending on the type and size of the pension assets, an actuary may be instructed to advise (generally) about how they should be shared between the parties to yield the same level of pension income for each party from a stated retirement age. If there is any disparity between the parties’ earning capacities, it is very likely their future pension contributions and overall pension income in retirement will differ.
There is a very real risk that menopausal clients may have been out of the workplace and only have small pension savings, may only have been able to make far smaller pension contributions post-divorce than a spouse who has progressed their career during the marriage, and may be experiencing symptoms which have an adverse impact on their decision to seek or secure additional pension provision or understand its true value. We need to be alive to this risk. At the very least, more attention should be given to checking the extent of any deficit between the client’s future pension income and future retirement income needs, with a view to ascertaining what monthly contributions would be required to make up the gap. This could then, perhaps, be factored into income needs.
• Income: Future income is not generally shared with a former spouse unless there is a very real financial need. In recent years, spousal maintenance orders have become less generous, both as to amount and duration.
A bill previously proceeding through parliament called for a maximum term for spousal maintenance; this was initially to be set at only three years, before being increased to five years. Menopausal clients may be earning somewhat less than their former partners, have no realistic expectation of ever earning anything close to that of their former partner’s income, and may be focused on the needs of others (children/older generations) to the detriment of themselves.
As a result they may be at greater risk from a specified maximum duration of spousal maintenance orders. Significant attention should therefore be given to whether or not the client’s schedule of future income needs does, or should, include the following in particular:
o Private menopause GP consultation fees: potentially for a decade or more;
o Prescription fees for any HRT;
o Pension contributions to increase the pension pot to the minimum required to meet retirement income needs, to include end of care life in some circumstances.
In summary, both legal and financial advisers should be alive to the additional impact which the menopause may have on clients who are going through other life-changing events, such as divorce. A greater understanding of the issues facing these individuals should help us ensure that we provide the very best advice to our clients at a difficult time.