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The Impact of the Cost-of-Living Crisis on Divorce

View profile for Layla Babadi
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2022 saw an enormous hike in the cost of living. Soaring energy bills, rising interest rates and the increased cost of food and fuel are undoubtedly having a considerable financial impact on people across the country. In relation to the breakdown of a marriage, many couples are querying how the crisis impacts separation and divorce.

For some couples, living under the same roof post-separation for financial reasons is a viable option for a period, however this is not suitable in all circumstances particularly where the home has become a hostile environment. Ultimately, the reality when a relationship breaks down is that one household’s finances will eventually have to be shared between two households. Both sides will feel the pinch as a result and the whole family is impacted. 

When you separate from your partner, you must navigate splitting your money, property, pensions, and debt. 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.

The first thing to acknowledge is that since the introduction of “no fault” divorce in April 2022, the legal process 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 advice and guidance from a solicitor. 

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. On the other hand, if you and your spouse reach an agreement yourselves, then that agreement can be made legally binding by instructing a solicitor to turn your agreement into a consent order, for the court to approve. In this scenario the costs are considerably less.

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.  

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 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.