The changing shape of modern families leaves incomes at risk

You are here: Home » News & Views » The changing shape of modern families leaves incomes at risk

Aviva's Winter 2013 report explores the growing diversity among UK families fuelled by trends in cohabitation, separation/divorce and remarriage. Past relationships are teaching families valuable lessons about managing money but Aviva's latest Family Finances Report also paints a worrying picture of unprotected incomes and outdated policies.

The Report reveals:

  • Nearly half of adults who live as part of a modern family (49%) have experienced at least one previous committed relationship (involving marriage or cohabitation) prior to their current family set-up.
  • More than one in six (17%) have had two or more past committed relationships, with 5% having had three or more.
  • More than one in three marriages (34%) is a remarriage for at least one partner, with 15% involving a remarriage for both parties.
  • Almost a third of two-parent UK families (30%) include one or more children from a previous relationship.
  • The average two-parent family in December 2013 includes 1.63 children from the current relationship and 0.66 children from past relationships. Looking specifically at step-families, these typically feature 2.24 children from past relationships.

Financial arrangements in the modern family context can be stretched and complex. One in three families with children from past relationships (33%) in December 2013 received financial support from an ex-partner. This includes 23% who get a regular income from this source and 10% who receive occasional payments. Regular monthly payments received range from less than £50 per child to more than £1,500, averaging out at £254 per child, per month. One in three (33%) who receive financial support rely on it to make ends meet, while another 38% would need to make major cutbacks to manage without this income.

However the Aviva Report also evidences only one in four (24%) knows for definite that their former partner has financial protection - such as life insurance, income protection or critical illness cover - in place. Whilst almost one in five (18%) knows that their ex-partner's finances are definitely not covered, another 30% fear this may be the case.

With many adults experiencing more than one committed relationship, any change in family circumstances can have a significant impact on financial arrangements. Updating bank accounts and mortgage/rent agreements seem to take priority when a relationship ends, with Aviva findings suggesting that only 6% of affected adults fail to make such changes following a separation. In contrast, almost one in five (19%) fail to update their will, potentially leading to future complications.