A divorce can be painful and messy, it can also be an expensive business too. In this article, we’re looking at the real financial implications of divorce in the UK.
We all know that a divorce can quickly descend into wrangling over who gets what in terms of assets and custody of any children. Often divorce also involves alimony which can make situations harder and more expensive.
Family law solicitors can help couples make sense of the whole divorce process, but there is a lot of information already around to help prepare those looking to end their marriage. In this article, we’ll be looking at the real financial implications of divorce in the UK.
The Financial Implications of Divorce
There are a number of ways divorce can affect your finances, some of these include:
Solicitors and Mediation
When first embarking on a divorce the couple will in most cases, need to hire the services of solicitors. A divorce solicitor can cost around £220 per hour in fees and, an amicable, straightforward divorce will usually cost the couple about £3500.
However, many divorces are complicated and negotiations can take months to resolve, meaning that the couple can rack up a considerably larger amount of money in solicitors’ fees. If a couple is unable to resolve some of their issues, they may also need to pay for a mediator at around £75 per hour.
Hidden Assets
In some cases, one or both parties in a divorce may attempt to ‘hide’ assets from the divorce process, under the belief that such assets are theirs alone.
If such hiding of assets is discovered, it can mean that the settlement terms will need to be recalculated, thereby incurring more costs in solicitors’ fees. This may also result in further legal action, involving additional legal costs.
Business Assets
If one partner owns a business, even if that business was launched prior to the marriage, the business owner may find that their business is considered to be an asset of the marriage. In this instance, it may be that the business owner will need to make a payment to their spouse or give them shares in the business in accordance with the division of assets.
Relocation and Solo Living
A divorce will almost always result in relocation for one or both parties, unless it has been agreed that one may stay in the family home and buy the other out. In some cases, selling any joint property is the best solution to giving the divorcees a fresh start.
This itself can be costly if both people are looking to either rent or buy their own property, especially if new furniture is perhaps required and everything else that comes with living alone, i.e paying bills on a solo income.
Childcare
When a divorce involves children, there can be a number of costs involved. To begin with, the spouse who does not have primary custody of children will usually need to pay child maintenance at between 12% and 19% of gross weekly income.
One or both spouses may also be subject to additional childcare costs. For example, it may be that a mother who, during the marriage, was a stay-at-home parent but now has to find work, meaning that daytime childcare is necessary. Parents in the UK spend on average £7000 a year on childcare.
Other costs regarding children include the need to purchase extra items such as toys and childcare items so that the child has access to these things at both parents’ homes.
Lifestyle
As the old saying goes, ‘two can live as cheaply as one’, while this is great news for a happy marriage, it’s a different story after a divorce. When a couple is having to pay two sets of rent or mortgage, bills and living expenses, it can result in a significantly diminished lifestyle.
After a divorce, both spouses may find that they no longer enjoy the same amount of disposable income, meaning that they may have to cut back on their spending, including socialising, holidays and treats.
Social life
A marriage provides companionship and as such, home life is a priority. However, after a divorce loneliness can be an issue and one or both parties will usually find that they wish to go out more often in order to spend time with friends and or meet someone new. While this is completely understandable, it does involve spending money on social activities and transport.
Transport
During a marriage, there are many times in which a couple will travel together in one car, whether it’s a weekly trip to the supermarket, the school and work run or a weekend away. Following a divorce, it’s often necessary for separate journeys and for both parties to have their own car, racking up extra costs in petrol and vehicle running costs.
Cutting costs by keeping things civil…
The cost of a divorce runs to far more than just legal fees and alimony and, shockingly, many people in the UK say that they have stayed in an unhappy marriage simply because they do not feel that they can afford to be single.
In almost every case, it’s well worth a divorcing couple trying to keep things amicable and civil in order to not just minimise legal fees but, also, to try to reach an amicable agreement on things such as childcare which can help to keep costs down.
