Covid-19 has caused a spike in divorce – here's how to cope

Lockdown has caused a spike in people filing for divorce. But splitting up involves some arduous administrative tasks. Here's what to do.

B

eing trapped at home with a partner during lockdown has clearly proved hellish for many couples. The number of people inquiring about a divorce rose by 42% between 23 March and mid-May, according to Co-op Legal Services.

“Concerns about finances, employment, coupled with the fact that households are having to spend an increased amount of time together can add strain on relationships,” says Tracey Moloney, Head of Family Law at Co-op Legal Services. 

If you are emerging from lockdown with divorce on your mind there is much to consider. “Negotiating a divorce at times of economic stability is difficult enough. As asset values fluctuate in the wake of the coronavirus crisis, the task of figuring out a fair split is made harder still,” says Lucy Warwick-Ching in The Financial Times. “Whether you are simply contemplating divorce or have come to the end of the road in your relationship, there are numerous financial and practical aspects to be considered in deciding to untie the knot.”

One main issue is splitting what you own. In most divorces all assets accrued during a marriage are divided equally. The easiest way to proceed is to agree to divide assets by percentages. 

“For example, cash from the sale of the family home can be split as a percentage of the sale proceeds rather than a fixed sum of money to ensure both parties share in the upside or downside of the property market,” says Warwick-Ching.

When splitting your assets don’t forget about your pensions. “Pension pots are usually the most valuable asset, apart from the family home, yet only seven in ten divorce settlements take them into account,” says Kate Palmer in The Times. 

This means women typically pay a huge price for their divorce when they retire. The average 65-year-old divorced woman has a pension plan worth £26,100, compared with £103,500 for a divorced man.

“Women contemplating divorce must ensure that they are aware of their own and their husband’s pension savings and likely outcomes in retirement,” says Philip Way, a partner at law firm Mills & Reeve. “Many women have found that, in keeping the house and not looking carefully at pensions, they have put themselves in a poor position for the long term.”

Weighing up the value of the family home versus pension savings is particularly difficult at present. Stockmarket falls may have affected your pensions, but on paper the family house is still holding its value. You could wait in the hope that the pension will recover, but in the meantime the value of your house could fall. 

“Not being able accurately to predict the future makes it impossible to identify the perfect time to start divorce proceedings,” says Sarah Coles from Hargreaves Lansdown in The Financial Times. 

If you do decide to go ahead with your divorce, then Covid-19 shouldn’t cause any delays. Throughout lockdown “divorce proceedings have been going ahead over video conferencing calls while the courts have been closed”, says The Daily Telegraph. Most proceedings don’t need a court hearing, however, and the Ministry of Justice has not noted any slowdown in the time taken to process divorces.

Recommended

Hong Kong’s crown slips as Singapore takes over
Asian economy

Hong Kong’s crown slips as Singapore takes over

As international sentiment sours on Hong Kong, other Asian financial hubs – primarily Singapore – are snapping up business.
6 Jul 2022
Price of gas soars as Moscow turns off the taps
Gas

Price of gas soars as Moscow turns off the taps

As Russia cuts its gas exports to the EU, the price of natural gas continues to rise. Restricted supplies could see energy rationing and recession i…
6 Jul 2022
Low growth and high inflation: a toxic cocktail for anxious markets
Stockmarkets

Low growth and high inflation: a toxic cocktail for anxious markets

Low growth, high inflation, central bank tightening, a strong dollar, and the risk of recession is proving a toxic cocktail for world stockmarkets – a…
6 Jul 2022
How to cut the cost of childcare
Personal finance

How to cut the cost of childcare

Childcare is expensive, yet few people are drawing upon all the government support they are entitled to. Ruth Jackson-Kirby explains what help is avai…
6 Jul 2022

Most Popular

Is inflation about to drop as recession takes hold?
UK Economy

Is inflation about to drop as recession takes hold?

Central banks are raising interest rates in an attempt to curb soaring inflation. But will that push the economy into recession? John Stepek looks at …
5 Jul 2022
Ray Dalio’s shrewd $10bn bet on the collapse of European stocks
European stockmarkets

Ray Dalio’s shrewd $10bn bet on the collapse of European stocks

Ray Dalio’s Bridgewater hedge fund is putting its money on a collapse in European stocks. It’s likely to pay off, says Matthew Lynn.
3 Jul 2022
Is it OK to buy Scottish Mortgage investment trust again?
Investment trusts

Is it OK to buy Scottish Mortgage investment trust again?

Scottish Mortgage investment was hit hard by the tech-stock crash, and it is still being buffeted by headwinds. Should new investors wait for those to…
5 Jul 2022