The Rising Cost of Living and its Impact on Divorce Financial Settlements

Since the introduction of no-fault divorce proceedings in England, couples do not need to tell their Divorce Solicitors why they are getting divorced. However, the reasons for separation are often important, as they may influence legal advice on the best childcare arrangements or the most appropriate financial settlement to meet the family's needs.

OTS Solicitors provides sensitive and pragmatic legal advice. We regularly advise on the impact of the cost of living on divorce settlements. Our Family Law Solicitors can help if you need legal advice on obtaining a financial court order or assistance with converting an agreement into a binding court order.

Contact OTS Solicitors.

How the cost of living can affect divorce settlement negotiations

The family court rules encourage couples to use alternative dispute resolution to reach a financial settlement by agreement, rather than apply for a financial order and ask the judge to decide the settlement. That’s sensible, as in most family breakups, it's better to reach a negotiated settlement rather than have a decision imposed by a judge.

When your separation is partially due to financial pressures, you may be particularly keen to reach a quick negotiated settlement to minimise legal costs and so you can get on with your life. However, that is not necessarily in your financial interests if your ex-partner is:

1. Refusing to give full financial disclosure.
2. Saying some assets are not relevant, such as pensions or their shares in a family business.
3. Refusing to agree to property or business valuations.
4. Moving money or property to family members.
5. Transferring assets overseas.
6. Deliberately talking up business or job security problems.

A Divorce Lawyer in London can explain whether the quick negotiated financial settlement your ex-partner is suggesting needs more careful consideration.

Using alternative dispute resolution to reach a divorce settlement

Alternative dispute resolution options include:

1. Solicitor negotiations.
2. Round table meetings.
3. Family mediation.

If you want to keep your family dispute out of court, you can also use family arbitration. That involves getting a privately funded arbitrator to make a binding decision and then asking the court to convert the arbitrator’s decision into a financial court order.

All alternative dispute resolution options, including family arbitration, can result in quicker and cheaper financial settlements than applying to the court for a financial remedy order. However, Family Law Solicitors point out that cost-of-living concerns should not always dictate the best alternative dispute resolution for you or govern the decision on whether to apply for a financial order.

Cost of living pressures and their impact on divorce settlements

Here are some of the ways the cost-of-living issues can affect divorce settlements:

1. Deferring the decision to separate.
2. Ex-partner not moving out of the family home into rented accommodation while the divorce negotiations take place.
3. The other parent wants shared parenting because of how child support works.
4. Mortgage options to transfer the family home into your sole name or to rehouse are more limited. Limited or expensive mortgage options can make it harder to decide if downsizing is realistic.
5. Worries about job security affecting decision-making.
6. You both want more of the available assets, such as equity in the family home, rather than pensions or assets that cannot be cashed in without penalties.
7. Getting back into the job market can be harder in the current economic climate if you have been a stay-at-home parent, or it is harder to increase your hours of work.

Some of these issues can also affect those who negotiated a financial settlement a while ago. For example:

1. Ex-partners wanting to reduce child support payments or saying they won't contribute toward nursery fees or school holiday club fees.
2. Former spouses wanting spousal maintenance payments increased or stopped.
3. If the financial court order included an order for the sale of the family home, an ex-spouse arguing that the sale price should be reduced, or that the estate agents should be changed.

How OTS Solicitors can help with negotiating your divorce settlement

Whatever your financial or family circumstances, negotiating and obtaining a financial court order can be a stressful experience. Many people are feeling the pinch relative to their previous standard of living. For you, cost-of-living issues may mean one fewer holiday a year or going to the theatre less frequently. For others, financial pressures may mean far starker choices or have resulted in financial abuse and coercive control. Whatever your family or financial position, our Family Law Solicitors provide:

• Pragmatic and strategic legal advice.
• Advice tailored to your situation.
• A commercial approach to family law negotiations.

What all that means is that we focus on you. This is how it works in practice:

1. You may want to take your ex to court. While we will sympathise with how you feel, if it is going to cost £X to make a financial remedy application, and the best-case scenario is that you will only get the same deal as the one your ex-partner is offering in family mediation, the commercial advice is that starting financial remedy proceedings is not worth the risk, especially as the court will not normally order your former spouse to pay your legal fees.
2. You want to accept the financial settlement your ex is suggesting, as you are worried about the cost of going to court to get a financial court order. We will review the proposals and help you reality-test them to assess their feasibility and identify their pros and cons. We will talk to you about likely court costs and timetables so you can assess whether your ex is trying to rush you into a financial settlement by feeding into your fears about the rising cost of living and the future of the London housing market.
3. Your ex-partner is offering you the equity in the family home, provided they keep their pension. They say it is cheaper and quicker not to get the assets formally valued. The deal meets your immediate needs and fears, but our Family Lawyers will also help you work out if there are alternatives, such as a reduced share of the equity and a pension sharing order, We will carry out a cost-benefit analysis of what you could be losing out on by accepting what your ex is telling you is a generous deal that you must accept quickly.

At OTS Solicitors, our lawyers are here to help with your divorce and advise on child law, and financial settlement negotiations and court representation.

Contact OTS Solicitors.

Our lawyers speak Arabic, Armenian, Bengali, Farsi, French/Mauritian Creole, Gujarati, Hindi, Spanish, Tamil, Tagalog/Ilonggo, and Urdu/Punjabi.

Appointments are available at our London offices, by phone, or via online consultation.

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• Pensions and Divorce Solicitors in London
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