Is the cost-of-living crisis causing more people to divorce?

There has been an increase in number of divorces and dissolutions over the past few months. In this time the cost of living has also risen sharply. But is the cost-of-living crisis really causing couples to want to divorce?

What causes a couple to separate?

For most separating couples, divorce or civil partnership dissolution is not something that is entered into lightly and often is the result of much heartache, discussion and self-reflection. Often the decision to separate is not down to one identifiable reason but many.

It is probably true to say that many couples experience money problems at some stage in their relationship, and in our experience it features in the top ten reasons couples cite when deciding to divorce/dissolve their civil partnership.

However, it often is not the principle of having less money that is the main issue, but rather when a couple aren’t on the same page about their joint and sole finances. For example, if one spouse/civil partner is spending excessively and racking up debts.

The other reasons clients tend to give us when they explain their decision to separate include (but are not limited to) feeling like they have drifted apart/have nothing in common, lack of communication, feeling unhappy, adultery, experiencing abuse, addiction, different parenting styles, no longer finding a partner attractive and cultural issues.

Separating during times of uncertainty

During periods of financial uncertainty, it is not uncommon for unhappy couples to speak to a family lawyer to consider their options. Sometimes the financially stronger party might think it is prudent to divorce when valuations for their assets are at their lowest in order to minimise their liability in the financial settlement.

Conversely, the financially weaker party might consider divorcing when valuations for assets are higher. However, there is not an ideal time to get divorced. These theories are often not borne out. For example, if house prices are low, less may be realised for the family home on a sale.

However, this might be mitigated because the property market is also depressed. Similarly, if the property market is booming more might be achieved for the family home, but it is likely prices will be high when purchasing another property.

When dividing assets, the Court and lawyers are looking to ensure that everyone’s needs are met – that means ensuring housing and income needs, both now and in the future, are met. There are no winners and losers when it comes to divorce or dissolution. There is a finite amount of money to be shared and cases where there is less available capital tend to be harder to resolve, as it is more difficult to meet both party’s needs.

Inevitably, for many, divorce prompts a drop in the standard of living experienced during the marriage, which can be a bitter pill to swallow for many, especially if it is not their decision to leave the marriage.

Legal costs

Some couples do delay getting divorced in times of financial crisis — we only have to look at the divorce statistics following the 2008 economic collapse to see the decrease. A common reason cited is that legal proceedings are expensive.

However, the cost of divorce or dissolution can be minimised if the parties can reach agreement either between themselves, through mediation, or after a short period of negotiation between solicitors. That is not to hide from the fact the divorce/dissolution process is an expense outside of the usual living costs, no-one ever budgets to get divorced.

It is those spouses/civil partners with unrealistic expectations in terms of outcome who tend to lose sight of the bigger picture. They can become bogged down in the “fight” and end up spending lots of money on lawyers (whilst not necessarily following their advice!). This only ever results in a pyrrhic victory.

Summary

So, do we think the cost-of-living crisis will result in more divorces? In short, no.

Whilst it may put a strain on many couples, the reasons for divorcing cannot be reduced to the cost-of-living crisis alone. The recent increase in divorce numbers is more likely to be a result of the April 2022 ‘no fault divorce’ reforms and couples wishing to separate amicably without apportioning blame. We predict that this increase in divorce will flatten out over the course of the year.

It is important to remember, as a rule of thumb in avoiding unnecessary expense, that it is less about the timing and more about the approach to separating that is most important factor to consider. Divorce and dissolution do not have to be a huge expensive fight and there are often better ways to resolve conflict than going to court.