How to save money when getting a divorce

If you're thinking of getting a divorce, waiting for the new laws in the next tax year could ensure a difficult process becomes a lot cheaper.

The first working Monday in January is "Divorce Day", so named because it is the most popular day of the year for people to contact solicitors about splitting up. There’s nothing like the combination of Christmas stress, January money worries and the thoughts about the future that a new year brings to make people reassess their marriage. 

If you are thinking about divorce, you may want to wait for a different new year in order to save yourself thousands of pounds. The new tax year dawns on 6 April and brings with it “the biggest shake-up in divorce laws for 50 years,” says Toby Walne in The Mail on Sunday, allowing couples to get divorced without anyone having to take the blame.

The change means there will be no need for legal wrangling over who is going to take responsibility for the failure of the marriage, and no-one will have to admit to adultery or unreasonable behaviour, or wait two years for a marriage or civil partnership to be dissolved. Instead, both parties can make a joint application for an amicable divorce.  

“The abandonment of fault-blamed divorce… should negate the need for difficult conversations in often emotional situations,” Prabhleen Kundhi, a divorce and finance solicitor for IBB Law tells The Mail on Sunday. “It will remove an often costly part of separation.” Legal bills for divorce can be up to £400 an hour, but the change could allow couples to agree on a divorce for as little as £300 and let them focus on issues such as children and the arrangement of their future finances. 

How to keep divorce costs down

Holding off until the new tax year can also minimise tax liabilities. Completing the divorce in one year means there is no capital gains tax to pay when you pass investments between you and your ex-spouse, says Sarah Coles of Hargreaves Lansdown. If you go into a new tax year, you may be liable. 

There are several other things you can do to keep costs down. Many solicitors now use online tools to gather all the information they need about you before your first meeting. This allows you to fill in all your forms in your own time and won’t form a part of your first meeting with your solicitor, so you won’t be paying for their time while you do administration. Look for a solicitor who is tech-savvy.

Remember that you pay for your solicitor’s time whenever you get in touch with them, so instead of sending them lots of emails with small queries, send one longer email with all the questions you want answered in one go, says Gemma Hope, director and solicitor at Family Law Partners. Also consider whether your lawyer is the best point of contact. “For non-legal issues, a counsellor, divorce coach, or financial adviser might be better placed to help.”

Don’t forget the pensions

As well as keeping your costs to a minimum, make sure you don’t lose out financially in the final settlement. Check that all your joint assets are included and don’t forget about large amounts. Many couples forget to include pensions when calculating financial settlements, or overlook the long-term impact of losing out on a pension. 

There are around 115,000 divorces each year, but 28% of them don’t include pensions in the settlement, according to research by Legal & General. “Many people don’t know that a pension is considered a joint asset, even if only one spouse has built it up,” says Rebecca O’Connor of Interactive Investor, whose recent retirement survey found almost half of couples don’t discuss pensions when separating. “Often, women will choose to take the home and will let their ex-husband keep the pension. At the time, this might seem like an advantageous split, but when it comes to retirement income, the partner who took the property rather than the pension has no income to live on.”

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