Does the cost-of-living crisis make a divorce impossible?
BY Kate Daly
21st Sep 2022 Managing your Money
Should you get a divorce during a cost-of-living crisis? Kate Daly, co-founder of a legal service that helps couples to nagivate divorce, explores your options
Most of us will feel the sharp pinch of the cost-of-living crisis as we approach the back end of the year. If your relationship has broken down, you may be wondering whether to start your divorce during a period of such economic uncertainty.
When you separate from your partner, you must navigate splitting your money, property, savings, pensions and debt. This can leave you in a difficult financial situation as you split one household into two. Fears about being worse off, coupled with the uncertainty around spiralling legal fees, might lead you to question whether you can afford to divorce given the current economic climate. There are three key considerations which I explore in this article.
Is the divorce process complicated?
The first thing to acknowledge is that since the introduction of “no-fault divorce” in April 2022, the legal part of the process of ending your marriage—the divorce itself—has become much simpler. It can be completed yourself via the government website.
This is largely administrative and there is plenty of free guidance and support out there to help you complete the online application. However, the financial remedy side of the process (the part that deals with how you split your finances) is separate, and it is this that usually requires guidance from a professional.
What affects how much divorce costs?
It is worth noting that how you choose to sort out your money and property impacts how much your divorce will ultimately cost. For example, a court battle with your ex involving barristers and solicitors is likely to cost tens of thousands of pounds.
The cheapest option, on the other hand, is to reach an agreement yourselves, known as a “kitchen table agreement”. If you want your arrangements to be legally binding, and make sure neither of you can make claims in the future, you will need a specialist to turn your agreement into a consent order, for the court to approve.
"How you choose to sort out your money and property impacts how much your divorce will ultimately cost"
If you need help to reach an agreement there are several services that can assist you with varying costs. Some charge VAT in addition to their advertised prices, whilst others are open-ended and bill by the hour. This can make for hefty legal bills if you’re not careful and can make an already difficult situation worse. Look out for reputable companies, check reviews such as TrustPilot, ask if they offer fixed-price services and check what’s included in the price when you are selecting a service to help you.
Should I wait till the cost-of-living crisis ends to divorce?
A second factor that may impact divorcing during the cost-of-living crisis is timing. A common misconception is that the court will consider your financial position at the time you separated. However, courts look at your financial position as it is when you divorce, not separate. This may mean your financial position is very different at these two timestamps and could end up costing you more or complicating your tax position.
It also becomes more difficult to negotiate settlements if time has passed and new partners and families are introduced into the equation. Finding the sweet spot between leaving time for raw emotions to subside and not complicating your negotiations with tax, new assets or new partners is worth giving some serious consideration to.
"Perhaps the bigger consideration is the impact on your emotional health and the well-being of the wider family"
However, perhaps the bigger consideration is the impact on your emotional health and the well-being of the wider family. Being trapped in an unhappy marriage and staying together for the sake of the children has been shown in research by the Children’s Commissioner to be damaging for children.
It might be that despite tough economic conditions, the better long-term option for the family is for parents to divorce, especially where there is a high conflict home environment. Financial difficulties and uncertainty will always add pressure to relationships, and if your marriage has already broken down it can make living conditions toxic.
Will the cost-of-living crisis affect divorce rates?
There is no doubt that the cost-of-living crisis will impact many divorces this year. It may make things trickier to navigate and it may mean thinking more creatively about the process you use rather than defaulting to a traditional solicitor route.
Trying to “optimise” your divorce, however, by looking at external factors such as house prices and energy costs can backfire as they are out of any one person’s control. The trick in uncertain times is to focus on what you can control, your attitude, your willingness to keep things amicable and researching the right process for you and your family, rather than rushing into an agreement you may regret.
Kate Daly is co-founder of amicable, the trusted legal service that helps couples to end their relationships and navigate the legal and emotional journey of divorce without the need for solicitors. Kate also hosts The Divorce Podcast where she interviews a variety of guests with the aim of changing the narrative around divorce, separation, and co-parenting
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