Lots of things in life can put you under extra financial pressure. Losing a job, having a baby or getting an unexpected bill can all have a big impact. But what kind of effect can splitting up with a long-term partner have on your finances?
When we think about splitting up, we often consider the emotional cost it can bring. This is only natural, but recent research from the Debt Advisory Centre highlights how separating your finances from a long-term partner can be costly and time-consuming as well.
According to the research, 81% of Yorkshire couples who had split over the last year said that one person in the couple had to find a new place to live. In some cases both parties had to find a new place – just under a fifth of Yorkshire couples found themselves in this situation. If you’ve grown accustomed to managing your budget based on two people paying the rent and bills, you may find that your living expenses rise as a result of the split.
None of the Yorkshire couples in the research were still living together, however 18% still had a joint tenancy agreement, while 46% still had a joint mortgage with their ex. And the last thing you want when you’ve spit with a partner is to be tied to them financially – perhaps even paying rent or a mortgage on a property that you don’t live in anymore.
Of the couples who had split over the last year, over a quarter still had either a joint credit card or loan together and almost a fifth still had a joint bank account.
All in all, this research supports the idea that financial associations can be difficult to break and end up hitting your finances hard.
If you’re splitting from a long-term partner, it’s bound to be a challenging time, but there are ways that you can minimise the financial fallout.
Take stock of the different ways that you are financially linked and then agree between the two of you how you will deal with each one – for example, who’s going to pay off the mortgage or who will cover any joint loans. The earlier you can agree on how to move forward, the easier it will be for the both of you.
It’s in everyone’s best interests for both partners to keep paying towards any joint loans and bills while you’re sorting everything out. If you fall behind on anything, you run the risk of damaging your credit rating and this will only make your situation harder in the long run.
You should close any joint accounts down and split the money. If you are the main cardholder on a credit card account, you will be responsible for all the debt. So if your ex was a named cardholder on the account, it’s best to cancel this and get a new one just in your name straight away.
If you find that you’re struggling with your debt repayments after a split, seek advice before your financial situation deteriorates.
Debt Advisory Centre: 0161 871 4881