Money and Divorce ??

At Smartpurse, we’re all about a carefree financial future, but sometimes our lives can take an unexpected turn. We have to look seriously about what that can mean for our money, and this is especially true of divorce.

The number of divorces in the UK in 2020 stood at 103,592 -?an increase of 4% on the previous year. And 63% of these divorces were instigated by the wife.?

The pain of separating can be compounded by financial uncertainty for one or both of you, especially if you have children to consider. Having a handle on your finances is crucial.

?Navigating choppy waters        

When you and your spouse are considering your money during a divorce, it’s a good idea to think both in the short and long term regarding a financial agreement. It’s one thing dividing up your money and property now, but you also need to think about providing for children and paying the bills in the long term,?even after you both retire.

Of course, if you can both agree on dividing money and assets and who gets what, it’s much smoother sailing and less expensive. However, whether you agree from the outset or not, it’s always a good idea to know exactly what you are entitled to and how you should go about dividing up your finances.

Don’t forget, you want your partner to be upfront about their money, so it’s important that you give full disclosure on your financial status too. There are also legal consequences – the distribution of money may fall in your partner’s favour if you attempt to hide assets.

Here are our top tips on savings, property, debts, and inheritances in divorce to get you started:

• Firstly, you’ll need to work out whether you can sort out your financial affairs by mutual agreement or through a court order. If you can’t agree, a court order can go a long way to protecting your money and from your former spouse claiming money after your divorce. It may seem a long, drawn-out process, but it will pay off.
• Spending or transferring your money and assets before a divorce settlement is possible, but not wise. A court is likely to look at your financial manoeuvrings as an attempt to hide how much you have and this could lead court proceedings against you.
• Don’t expect a 50/50 split of savings or debt. One of you might have children to look after or a business to take over, so make sure you have compensation for every responsibility you have.
• Pensions are often one of the most valuable assets a couple has, especially if one of you has?defined benefits (aka ‘Final Salary Scheme) pensions. They are often overlooked in separation agreements and the impact of this oversight can take years to be realised.?Bring in experts in the shape of a Pensions on Divorce expert or a Pensions Actuary.?They will look at your pensions and their values and offer advice on how they can be divided.?To benefit from the pension of a previous partner does require a court order but if you’ve already both agreed how to divide the pension benefits, this can be a formality.
• How you split an inheritance can very much depend on when it was received. If either of you inherited before your marriage, there is a good case for not splitting it, especially if it was kept separate from the family finances. There is no guarantee that this will happen though, as you will both need sufficient funds from divided assets. If the inheritance was during your marriage, this will have to be taken into consideration when splitting your assets.?Similarly, make sure you look at any ‘death in service’ benefits from pensions and the wording of the expression of wish (which shows where a pension pot goes after your death).?

And if you aren’t married?        

If you thought that list was complicated, splitting your assets if you are not married is a whole other kettle of fish!

Unfortunately, there is no legal process for separating couples who are not married, so arrangements can be trickier. The split can be done with or without a solicitor, but seeking legal advice is always a good idea, especially if you are unsure of your rights. If you do use a solicitor, remember to factor in their costs for when you reach an agreement. Fees can become very high if it is a long process.?

A good place to start is with listing all your money, assets,??pensions,?debts, and dependents as well as who will be paying which bills in the future. From there you can work out how it can all be split between you.

Who owns what
Prenuptial agreements and mediation?        

A prenuptial agreement (prenup) is a document drawn up before you marry and states who will be responsible for what during a marriage and, in the event of a divorce, how the wealth and debt will be divided.

A prenup can help protect the assets you already have prior to marrying and set out support for any dependents.?You can also use it to record your assets at the start of the marriage (what pension contributions had been made prior to you getting together, for example).?

Sounds great, right? No need for solicitors if you divorce??Well, no, not quite. Prenups aren’t legally binding in?the UK, but they can go a long way to help you protect what is yours?and to have a clear view of who contributed what while you were together.

If you are unable to come to an agreement on a divorce settlement but don’t want to take your partner to court, mediation might be the right thing for you. You can use a mediation service whether you are married or not. You will have the benefit of an independent, neutral third party who will help you come to an arrangement that will suit both of you.

With the current court backlogs, courts may insist on mediation before you can bring the case to them, so you may save yourself a lot of time and frustration if both parties are willing to involve a mediator.?

Recovering any lost wealth is no easy task after a divorce or separation, but financial planning and advice can go a long way to helping you get back on your feet. Don’t forget to agree terms for if you or your partner remarry, as this will have implications on child maintenance,?and pension death benefits,?among other things.

Money School in the App Store        

The Smartpurse's Money School App is a great way to plan your financial future, with bite-sized lessons and practical help. You can register?here?for your ultimate financial toolkit.

No strings attached - try it for free with a 7-day trial and only ￡7.99 monthly afterwards.?

Download the App

In the news?        

A new Prime Minister and what it means for your money

After weeks of debate and a vote from Conservative party members, we finally have a new Prime Minister. So, what does this mean for your finances? Here is a quick list of announcements Liz Truss made in the first few days of being PM:

• Low-income families will get more help, especially during the cost-of-living crisis
• A maximum price cap has been put on the cost of energy bills - ￡2,500 a year for a typical household. This doesn’t include households that use heating oil. Green levies have also been suspended.?
• The ￡400 energy bill discount will still be paid
• A six-month support package for small businesses has also been announced

And how will this be paid for? With government borrowing. Whether the taxpayer ultimately pays for this is yet to be seen.?

Join us for our live event in London        

Monday blues??Let us shake things up for you and give you a boost of confidence at our next?live event.

On Monday 10th October?come and join us at the lovely?Riverside?for?drinks, a?buffet?and some?financial education. The RIverside is a hidden gem, right on the river and just a few minutes walk from Vauxhall tube. We’ve snagged the Green Room for the event to create the perfect setting for our evening.

Our?guest speaker?is the fabulous?Laura Ann Moore?to talk about having financial security as a woman.?She’ll also be answering all your money questions thorughout the evening.?

Come and?mix and mingle?from?6 pm?onward with a glass of prosecco to get things going. Then you can enjoy an excellent buffet and two empowering hours of financial education.?

If this is right up your street, then book your?ticket?now.?Spaces are going fast so don’t delay!

Get your ticket

Figure of the Week        

￡48 billion a year

That’s the amount separation and divorce costs the UK taxpayer per year. And it’s not just the amount we pay solicitors and the courts. This includes the implications of it affecting your health, lost work, costs of legal aid, and extra support including housing.

Meet the expert –?Ceri Griffiths        

Founder of the Willow Brook Lifestyle Financial Planning, who works exclusively with women in the process of divorcing and expecting a 250k+ settlement. She is passionate about breaking down the cold corporate image of financial services, especially if you have not been the financial manager in your relationship.

Ceri?says:

“I want you to know that you are not the only one in this position, and that it’s quite normal to not know your finances…I want you to know that you’ve got this.“

SmartPurse in the news        

MetaPurse Studio close to launch

Welcome to the?MetaPurse! Like the Marvel Multiverse but more empowering!

SmartPurse are launching the world’s first independent financial wellness platform in the?Metaverse?as a further step toward financial equality for women and men.

Six out of ten women say they do not understand financial issues. And only 13% invest in digital assets, compared to 23% of men. The new?MetaPurse Studio aims to awaken interest in financial and technology topics, especially among women and young people. It will promote knowledge and provide them with fundamental training.

The MetaPurse Studio will break new ground for inclusive financial education, encouraging young women in particular to have a good financial grounding. In the studio, customers can intuitively explore, create and co-design virtual spaces and develop themselves further in an inspiring learning environment.

Great importance was attached to the graphic representation of the world of experience during development of the user experience. This means that visitors need no prior know-how so even people with little IT knowledge can easily participate. The worlds of experience are created for 3D but work without VR glasses via the Internet.

SmartPurse’s Olga Miler says:

“We want to make financial education as exciting as possible. The Metaverse allows for completely new design possibilities. With the MetaPurse Studio, we want to make new technology and new forms of finance tangible for everyone and interesting for young people so that everyone can acquire the basic knowledge interactively.“

Money Inspiration        

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