Is it worth putting off a divorce during the cost-of-living crisis?

Divorce can be a financially and emotionally draining experience. Despite no-fault divorces coming into effect in 2022, the process can still be expensive, with costs likely to run into thousands of pounds.

Throw in the cost-of-living crisis, fuelled by rising inflation and interest rates, and you might find your relationship is under even greater pressure. Plus, current uncertainty in the housing market might mean you’re thinking twice about whether now is the right time to sell your property and find a new one.

So, if you’re contemplating a divorce, you may be wondering if it’s worth waiting until the economy recovers, house prices come back up and interest rates and energy prices go down.

Here are a few things to consider:

Impact of the cost-of-living crisis on divorce

Money worries caused by the current economic downturn can add to already strained relationships. Couples planning to divorce may find they’re arguing more about their day-to-day spending, bills and financial plans. The expense of separating can add further difficulties.

Alistair Carter, managing director at mediation service Mediate UK (Opens in new window) expects rising costs to negatively affect already fractious relationships: 'We believe the cost-of-living crisis, interest rate rises, and economic uncertainty will make some struggling relationships more tense and therefore lead to more separations and divorces,' he says.

A mediation service aims to help couples reach an agreement over money, property or children without involving the courts any more than necessary. A session is around £120 on average, with the overall cost depending on how many sessions you need.

Carter adds that the average divorce can take 11.5 months to finalise and can cost more than £20,000 if a court has to decide how assets should be split.

Other costs associated with divorce:

• Court fee per couple to apply for a divorce or dissolution: £593
• Financial consent order: £53
• Average solicitor fees for uncontested divorce: £450–£950 if you're the petitioner

There are other costs to consider, such as drawing up a new will, fees for child arrangement plans and potential financial advice fees. Some charities, like Cancer Research UK (Opens in new window)British Red Cross (Opens in new window) and Guide Dogs (Opens in new window)offer free will services with the option to leave a charitable gift in your will.

Should we wait until the cost-of-living crisis is over to divorce?

The answer to this will depend on your situation.

A key consideration is whether you can afford to live in two separate properties. If not, you might have to continue living in the same household until the economy improves or you feel financially ready to move on. If you're fortunate enough to have extended family or friends who are happy to offer temporary accommodation, that may be an option for one or both of you. However, this must be made clear to legal counsel or mediators to avoid future claims of abandonment of the marital home or child custody arrangements.

You could start divorce proceedings while living together. But you may need to formalise a financial settlement that allows both of you to live in separate places.

What to consider when funding two households

Most couples going through a divorce or separation need to address the issues of funding two households in the future.

As well as the upfront purchase price of two homes, there is also the availability and affordability of a mortgage to think about. House prices are still high, even though they dipped slightly at the end of 2022.

Rental properties are also in high demand, so rents are rising, and you may be competing with others. Your individual credit history or lack of one will be a factor, too. If you do have to take on debt, make sure you borrow responsibly.

How to divide investment assets when getting divorced

Stock markets fluctuate and you may find the value of your investments has changed. So, it's worth finding out what the value of the investments are and any conditions there may be for cashing these in.

Pensions may not be able to be cashed in if you're on a final salary scheme or if you're under 55. Additionally, if you start withdrawing money from your pension you might be restricted from making future pension contributions.

You could agree how to divide investments now and then arrange for the actual division to take place at a later date. Make sure to have your agreement made legally binding through a financial consent order.

Your solicitor or mediator may not be qualified to give you financial advice, if this is the case it may be worth speaking to a financial adviser.

How do I know if I can afford to divorce my partner?

The MoneyHelper website has a free online calculator (Opens in new window) to assess your financial situation before a divorce. This can help you plan not only how to survive financially, but to hopefully thrive after a divorce.

If you're unemployed, you'll need to think about how you would fund bills and housing going forward. This means considering how to find work, or applying for benefits such as universal credit (Opens in new window) which can help with housing costs.

The below services can offer further guidance and support:

• Citizens Advice (Opens in new window)
• Relate (Opens in new window)
• Find a solicitor at resolution.org.uk (Opens in new window)

Further reading

• Help to protect your financial interests during a divorce
• How to talk about money with your partner
• The pitfalls and pleasures of living together

The Hub is intended as a knowledge portal to provide information on a range of topics, including financial products and lifestyle management. These articles are not financial advice. Articles may reference products and services which Chase UK does not currently offer. We recommend seeking out an independent financial adviser.