The Impact of the ‘Cost of Living Crisis’ on Divorce

The Impact of the ‘Cost of Living Crisis’ on Divorce

Liz Watson provides insights into the impact of the current cost of living crisis on divorce and tips for separating or divorcing couples to  consider when reaching financial settlements.

With prices of energy, fuel and consumer goods rising quicker than the average wage, many families are now feeling the pressure that this is having on their ability to meet their daily living costs. But what impact does the current cost of living crisis have on divorce?

Liz Watson of Streathers Hampstead sets out below some top tips for separating and/or divorcing couples, along with what they should consider when reaching financial settlements.

  1. Create a detailed budget for your future expenses

When you separate from your spouse, you will need to think about the resources that you both have available to you, as well as what you both will need to meet your monthly outgoings. It is advisable to spend some time creating a budget of your estimated monthly expenses. This is likely to be a crucial part of any financial settlement and it is vital that any agreement reached now is also viable in the future. Whilst no one can predict the future, when completing your budget, consideration for rising living costs will need to be taken into account, as far as is possible. This will become particularly relevant when discussing the duration and quantum of any maintenance orders. Another benefit of completing a budget is that you may well find that there are certain expenses you and your spouse can agree to cut back on immediately, even before an overall agreement has been reached.

  1. Be pragmatic

It is advisable to take a pragmatic and non-confrontational approach to negotiations wherever possible, as this often results in parties arriving at a resolution quicker and more amicably than they otherwise would have, thus saving their money for the future. Alternative dispute resolution such as mediation or arbitration should be considered if you are unable to reach an agreement between yourselves.

  1. Seek legal advice at an early stage

Everyone’s circumstances are different and what may be best for one person may not work for another. Prior to taking any steps, it is a good idea to seek legal advice to discuss the options available to you.

  1. Take financial advice at an early stage

It is important that any settlement reached is affordable. If you have savings, investments or pensions then it is always advisable to seek financial advice as well as legal advice in order to understand exactly what a settlement means for your future.


What if the financial settlement that you have reached is no longer workable due to the rising costs of living?

Some people are finding that the agreement they have reached is no longer suitable because of the cost of living crisis. This is particularly the case in relation to maintenance orders.

Maintenance orders are variable in the event of a change in circumstances, so long as an application to court is made prior to the end of the maintenance term. However, the likelihood is that both parties will be feeling the pressure from rising prices and both parties are likely to have less disposable income at the end of each month.  The court will look at both the needs of the party receiving the maintenance and the affordability for the paying party when assessing maintenance.

Applications to vary maintenance orders are often unlikely to succeed unless the paying party’s financial position has either improved (in the case of the receiving party applying to vary upwards) or worsened (in the case of the paying party applying to vary downwards) since the making of the initial order.

It is advisable to try and discuss the matter directly with your ex-partner before returning to court. Both parties should put together a revised budget and negotiate an agreement accordingly. The likelihood of success of an application to vary a maintenance order is entirely dependent on circumstances, so it is always recommended that independent legal advice is sought prior to taking any further steps.

Enquiry Form

We'll only use this information to handle your enquiry and we won't share it with any third parties. For more details see our Privacy Policy