Can I afford a divorce during the cost-of-living crisis? How to choose the right time and find legal advice

Whilst we are only a few weeks into the new year, for many people that renewed sense of optimism that new year brings, has evaporated, alongside broken new year’s resolutions. For couples in unhappy relationships, who may have promised each other to make a go of it (or perhaps who continue to silently get on with it), only time will tell whether the chiming of a new year will be enough.

Separation and divorce can be a pretty daunting step at the best of times. However, we are now living in the midst of a cost-of-living crisis, with high interest rates and eye watering inflation eating into peoples’ disposable incomes. For many, the thought of separation is something they may consider placing on hold until the economic storm passes.

In my experience of almost 30 years as a family lawyer, there has never been a perfect time to separate from a financial perspective. The future will always throw up surprises, both good and bad. Who could have predicted what happened over the last 12 months? However, delaying pursuit of a happier life ignores the unhappiness of the present.

Of course, it would be foolhardy to ignore the need to ensure that a divorcing couple’s current and future financial needs are met.

It is reasonable to assume that the impact of inflation on household incomes will continue to pose a problem for some time to come. For those who need ongoing financial support this will need to be factored into their monthly maintenance payments, as well as ensuring that realistic household budgets are presented. It is regrettably a fact of life (as well as basic maths) that upon separation, two households have to be funded instead of one. That requires a dose of realism on the part of each party – which can often be in short supply in the short term.

However, as prices rise, so does the need to ensure that buying power rises at the same rate. Building annual increases into maintenance payments in line with inflation can overcome the risks of falling into a poverty trap purely by reason of divorce.

The future of the housing market remains uncertain. However, there are signs that the market has cooled, with properties becoming more affordable, and whilst mortgage interest rates remain high, they have begun to fall of late, arguably placing buyers in a better position than in the recent past. Mortgage advisers can be of huge assistance to anyone seeking to purchase a new property in the current climate.

Most importantly, it is the role of the family lawyer to provide robust, objective advice during uncertain financial times. Negotiating and presenting a strong, well-reasoned case can often lead to significant costs savings in the longer term, by ensuring that any settlement is future-proofed, so as to enable that person to look to the future with confidence in such uncertain times.

If you have any questions about financial settlements, or divorce generally, you can contact me on 0191 4065002 or email me at [email protected]