January has always been the busiest time of year for family lawyers.  The stresses of Christmas are often the final straw in a relationship.  This has caused the first working Monday of every January to be dubbed ‘Divorce Day’ in Family Law circles.  However, history aside, will the cost of living crisis increase divorce numbers higher still this month? 

According to Google, searches for information on divorce rise by between 10% and 30% every January.  If we put this into context, that would be a sizeable number of new applications in January 2023 given that numbers are already at a 10 year high as more than 33,200 applications were made between April and June 2022.

Then there is the added financial pressure being felt by so many couples as a result of the cost of living crisis.  This crisis is injecting even more tension into already strained relationships.  Many experts feel this means the cost of living crisis will increase divorce numbers this month.

Law firm Slater and Gordon recently conducted a survey of 1000 married people and 1000 recently divorced people.  Their research shows the cost of living crisis has had a worrying effect on marriages with 40% saying it has placed additional pressure on their marriage.

However, 35% also said the cost of living crisis has stopped them from starting divorce proceedings.  This makes it the most common reason to stay together, 2% higher, in fact, than having children together.

Similarly, only 15% of respondents said they’d started divorce proceedings because of the cost of living crisis.  This is around half the number of respondents who cited infidelity or simply falling out of love as their reason for divorcing.

It is also important to note that while the economy is impacting marriages there two other major factors will have played their parts in the spike in divorce proceedings seen last year.

The first was the pandemic and resultant lockdowns.  The proximity people were forced to live under for so long had the same effect as the Christmas period tends to, only over many more months and with everyone feeling so much more uncertainty as to what would come next and when it would end.

Secondly, the long expected ‘no fault’ divorce legislation came into force.   Many couples held their application back to take advantage of the new rules and make a joint and less acrimonious application without having to lay the blame at one party’s door.

That said, divorce rates have always increased during recessions so it is hard to believe our current financial situation will be any different, particularly given the effects of the pandemic and apparent acceptance of ‘no fault’ divorce.

Will the cost of living crisis also affect divorce settlements?

It is not only divorce statistics that are feeling the effects of the cost of living crisis.  The economy is also impacting divorce settlements.

One of the most public signs that the cost of living crisis is having an effect on divorce settlements is a growing demand to return to index linked maintenance settlements. 

As index rates continue to soar, some ex-spouses could potentially be faced with the worrying prospect of their maintenance payments rising by as much as 9%.  This has understandably forced them to renegotiate.  The recipients may resist attempts to reduce this rise but there needs to be some common sense as salaries simply aren’t increasing in line with inflation.

On the other hand, more and more of the settlements currently being pursued by recipient parties are being based on index-linked maintenance payments.  As there is so much uncertainty around the economy, this is a trend many expect to continue as recipients seek to protect themselves against rising prices.

The other factor impacting divorce settlements is the backlog in the family courts.

As couples are facing longer and longer waits for a hearing, many more affluent couples are opting instead for a private financial remedy hearing.  Although this is expensive (a private judge  can cost anything from £2000 to £10000 a day), a private hearing will almost certainly expedite the process which in turn could afford the couple significant savings in the longer term.

If you would like to discuss a potential divorce or separation with one of our highly experienced family barristers, please contact us today.

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