Jo Carr-West discusses the impact of the cost of living crisis for divorcing couples in eprivateclient

Jo’s article was published in eprivateclient, 17 January 2023, and can be seen here.

Jo Carr-West, Partner in our Family & Relationships department, explores how the UK’s current recession and high inflation are creating new complexities for divorcing couples.

While economic hardship has historically led to fewer divorces due to the cost of separation, financial strain can also intensify relationship breakdowns. For those navigating divorce during this period, accurate and up-to-date financial information is crucial. Asset values, mortgage capacity, and pension valuations must be regularly reviewed, and budgets adjusted to reflect rising living costs.

With court delays worsening, many couples are turning to alternative dispute resolution methods like mediation and arbitration, though those in court may need to seek updated financial directions ahead of hearings.

Jo also highlights how economic conditions can influence settlement outcomes. The marital standard of living, a key consideration in long-term marriages, may no longer be sustainable across two households. Settlement terms must reflect market realities, such as potential delays or shortfalls in property sales, and may require flexible arrangements like instalment payments or inflation-linked maintenance.

Importantly, once a financial agreement is approved by the court, it is binding, even if circumstances change, except in the case of ongoing maintenance, which can be varied. To manage legal costs, couples are encouraged to avoid litigation where possible and explore cost-effective alternatives, including joint legal advice services.

Read the full article on the eprivateclient website [external link].