Fair Shares? Sorting out money and property on divorce – how do couples currently cope?

By the ‘Fair Shares’ Project Team: Emma Hitchings, Caroline Bryson, and Gillian Douglas

In more ‘normal times’, the start of each new year marks the arrival of media coverage of the ‘divorce season’. Newspapers publish feature articles reporting that the stresses of Christmas prompt many couples to decide that enough is enough, and to make a new year’s resolution to get out of their marriage. Family solicitors duly issue press releases to advertise their services to assist them, both with getting the divorce itself and with sorting out the financial, property and child arrangements that will need to be made to deal with life going forward. In reality, this New Year ‘spike’ in divorce applications may not be much more than an urban myth. The divorce statistics show that in the years from 2011 up to and including 2019, there have only been three years when the first quarter of the year – January to March – has recorded the highest number of petitions (applications for a divorce) filed across the year. Rather, there tends to be a consistent flow of petitions across the year.

Of course, the past 12 months have seen the spread of the pandemic, which is likely to have affected people’s readiness and ability to exit their marriages in ways we cannot yet fully know or understand. The final divorce statistics for 2020 are yet to be published but we do know that there was a significant drop in the number of petitions filed during the quarter coinciding with the first lockdown in spring 2020, but that these returned to more normal numbers in the autumn.  Whatever the statistics may say, and regardless of whatever is happening with the pandemic, we know that people can’t put their lives on hold indefinitely, and many couples will go through a divorce this year.

Getting the actual divorce decree may not be too difficult (and it can all be done online), although it is not cheap, at £550, and it will take several weeks or months to be processed. But there is no legal aid to help cover the cost of legal advice and representation, either for the decree itself or for the post-divorce arrangements that need to be made, and if these are complex or the couple disagree, it can be very costly to sort them out. We know that it is more expensive to live in two households than one, so that unless they are very well-off, many couples are going to struggle to make incomes and property stretch to cover their new situation and to meet their financial needs, and those of their children. We expect these issues to be all the more acute in the context of the expected economic downturn.

Given the lack of legal aid, it may not be surprising to learn that only a third of divorcing couples actually get a court order to sort out their finances after they divorce. How many of the remaining two-thirds reach private arrangements with the help of a solicitor or mediator isn’t known. If they can’t afford such help, there is plenty of information on the internet about what to do, and many people will turn to family and friends for advice. But what they won’t be able to do, because the information isn’t available in any systematic way, is to find out what the financial consequences of making particular arrangements might be, for people in their kinds of income brackets and family circumstances. For example –

  • What happens if they decide to sell the house and split the proceeds after paying off the mortgage but can’t sell, or find that the price they achieve won’t stretch to enabling both parties to re-house themselves comfortably?
  • If they want to avoid the child support system, how sustainable are private child maintenance arrangements?
  • What is the best way of sharing a pension to secure an income for both parties after they retire?
  • And what happens if one spouse simply refuses to reach any kind of arrangement?

Our new study, funded by the Nuffield Foundation, aims to collect information from couples who have recently gone through the divorce system, on what finance and property arrangements they have made (or ended up with), how they made them, and how they’re coping with them, so that we can answer these kinds of questions. We want to know what the actual experience has been like for these couples, and their children, in order to help couples, lawyers and advisers, and the courts, to understand the implications of different financial decisions and the economic impact of different financial arrangements.

When we think of how much family life, social attitudes and economic circumstances have changed, it is remarkable that the law which governs how money and property are allocated on a divorce is still based on legislation that is 50 years old. Reform to update the system has been regularly debated and is the subject of a private member’s bill introduced into the House of Lords in each session of parliament for the past few years – the Divorce (Financial Provision) Bill. We have some evidence, at a statistical level, to show that divorce impacts negatively on wives and children. We have some evidence of how the law operates for the very wealthy who can afford to spend extravagantly on court proceedings, because their cases get reported in the media and in the law reports.  We also have some information on the kinds of arrangements made if couples of more modest means do get court orders, but we don’t have a picture of the situation for those two-thirds who don’t use the courts at all.

Law reform can’t – and shouldn’t – take place until there is a robust evidence base to show the real impact on families of the law as it currently stands. The findings from our study will, we hope, fill the current evidence gap and provide a more complete picture of what works, and what doesn’t work, so that we can update our law and ensure it meets the financial needs of all divorcing couples and their children in the years ahead.

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