- Four in ten (39%) Brits found it difficult separating finances after splitting from their partner
- 46% of Brits said that agreeing what to do with their marital home and any outstanding mortgage payments was one of the most stressful parts of their separation
- Over half (58%) of Brits say their previous experiences would put them off ever having a joint account again in future
With the term “divorce” seeing an 80% increase in Google searches year on year and searches for ‘joint account after divorce’ increasing by 68%, the last 17 months have tested people relationships, some to breaking point.
To help understand what many separating couples will be facing over the next few months, debt management company, Lowell, have looked into the UK’s experiences and attitudes towards joint finances.
Currently, half of all Brits in a relationship have a joint bank account. However, a huge 47% of them feel like they were not given the right guidance or advice on what would happen to their account if they were to separate.
For those with bank accounts who have gone through a separation, four in ten (39%) found it very difficult to separate their finances, and 58% believe that their previous experiences will put them off ever having a joint account again in future.
Separating when a couple share joint finances can lead to debt as some may find themselves having to pay off amounts that their partner has accrued. This is something that nearly half of Brits (45%) found as one of the most stressful experiences from their financial split.
The scenarios causing the most stress
With so many people having a difficult experience with joint finances, the research also highlighted the most stressful events that have occurred for people who have financially separated from a partner.
According to the research, Brits found the following situations the most stressful when financially separating:
1. Agreeing what to do with the marital home and any outstanding mortgage (46%)
2. Paying off debts their partner had accrued (45%)
3. Having their own credit score impacted by their partners behavior (31%)
4. Agreeing how to split savings, investments and other funds (30%)
How to handle joint finances
John Pears, Managing Director of Lowell, offers his advice to any couples with joint finances going through a separation.
“Separations are always difficult, and if you have combined and intertwined finances then things can get even more tricky. Many people are not aware that when you break-up, you are both equally liable for any joint debt – even if it was not you who spent the money.
“To make sure things go as well as they can do during a separation, these are some steps you should consider taking:
1. If you can, communicate clearly with your partner about what will happen with your finances. Talking things over and coming to a mutual agreement can benefit an already difficult situation, however, understandably, this is not always possible.
2. Ensure that you tell your bank about your separation as soon as possible so that they can freeze the account.
3. If things are acrimonious, move your wage and regular incomes into a different account. This will help to keep things separate from your partner when you receive any future payments.
4. Work out your new budget. Following a separation, your income and outgoings are going to be substantially different to before. You should prepare yourself for this by working out a new budget, so you can understand your financial situation and what you are able to spend.
5. Know that you are not alone. As highlighted in the research, many Brits go through financial separations and although it is not easy, there are many people and organizations out there to help you – so don’t be afraid to reach out but take care to ensure that you are getting your advice from reputable sources.
For more information please see: https://www.lowell.co.uk/about-us/lowells-blog/financial-health/how-to-deal-with-joint-debt-after-a-separation/