Separation enquiries have shot up 136% since the start of 2021 – with costs also rising due to a sluggish housing market and stalling economy
Divorce enquiries have skyrocketed in the UK – but separating couples are finding it difficult to fund the split in such a challenging economy.
Figures show that lockdown pushed thousands of couples to the brink in 2020, with queries to divorce lawyers jumping by 42 per cent compared with the same period in 2019.
This year’s figures are even higher – with June 2021 seeing a staggering 136% rise in separation enquiries compared to the beginning of the year (itself traditionally a peak time for divorce).
According to Sarah Havers, a senior associate in the divorce department at Stewarts law firm, lockdown has played a big role in driving the national divorce rate up.
“Even the strongest of marriages have been severely tested by the overall stresses of the pandemic – financial, emotional and physical,” stated Havers.
“Having been forced to take a long, hard look at their partners, the much-heralded promise of ‘freedom day’ took on a whole new meaning.”
42% of marriages end in divorce, and for many separating couples, the process is among the most painful of their lives. It can also be one of the most expensive – costing £14,500 on average. For those who need to sell property, or contest a settlement through the courts, the costs can amount to tens of thousands of pounds – with an average couple spending £30,000 on solicitors’ and court fees, £35,000 on rent and £144,000 on a new property.
When properties are valued in the millions of pounds, the difference between selling in a bull or a bear market can run into six figure sums. Equally, when selling a business, market cycles, interest rates and banks’ lending appetites have a huge impact on valuations. In 2012, the TopShop and Topman fashion brands were valued at $3.2 billion. In 2021, they were acquired for around $300 million.
For high net worth couples, the combination of pensions and investments can lead to complex calculations of value and future worth. Financial experts and lawyers may be required to reach a fair resolution – both of which are expensive to hire.
Extra financial pressures have been created as a result of the pandemic, with factors such as reduced income on furlough, stagnating work prospects in harder-hit industries (e.g. travel and hospitality) and reduced working options due to childcare or illness.
The divorce process can also be lengthy – with a high backlog of court cases resulting in long waits for any couple that cannot agree on division of assets.
Whilst divorce rates appear to be rising during the pandemic, options for many couples are limited due to a sluggish housing market, stalled economy and rising prices.
Stephen Clark at bridging finance company Finbri said: “When a couple decide to divorce, they often need to find large amounts of money at short notice.
“This could be to buy a new property, or to buy out their partner’s interest in the family home or business.
“Bridging loans can provide a solution. By using bridging finance – often secured on the value of a property – a couple can divide their assets without the disadvantages of a forced sale.
“It can be very useful in smoothing the path towards an amicable separation and allowing people to get on with their lives.”
Four ways to minimise costs during divorce proceedings include:
1. Having an ‘uncontested’ divorce
Beyond the basic legal costs of divorce – around £1,000 for the ‘petitioner’ (the person who initiates the divorce) and around £300 for the ‘respondent’ (the other spouse) – there are no other inevitable costs. If partners can resolve financial and logistical issues, they can retain full value of assets. The UK government’s online MoneyHelper website offers free advice.
2. Choosing mediation over court
Using a mediation service costing between £50 and £120 per session can save a great deal of money and aggravation compared to a lawyer. The best-known UK organisation offering mediation services is Relate.
3. Choosing arbitration over court
Qualified arbitrators listen to evidence from both sides to make a decision. Arbitrators can be found on the Institute of Family Law Arbitrators website, with costs averaging around £3,000 shared between a couple.
4. Doing research
Research is vital. The government’s child maintenance calculator can provide an idea of figures, based on your income and expenses.
- ENDS –
About Finbri
Finbri is a UK-based financial specialist offering residential and commercial bridging loans, development finance and refinancing to individuals and companies.
Drawing on an expert team of finance brokers, Finbri brings the market’s most competitive rates for secured loans from £26,000 to £250 million, repaid over 1 to 24 months.
With Finbri, customers can save money and time on finance loans – getting the best deal possible in the process.
Find out more online: https://www.finbri.co.uk/
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