Hidden cost of divorce and separation surpasses £14,500 for UK couples, according to Aviva survey
Separating couples remain living together because of prohibitive housing costs
UK couples spend an average of £14,561 on legal and lifestyle costs when they break up, an increase of 17% since 2014 when it totalled £12,432, according to Aviva's Family Finances Report.
The report found:
- Couples typically spend £14,561 on legal and lifestyle costs when they divorce or separate, an increase of 17% since 2014 when the total was £12,432 ?
- Total UK cost of separation expenses reaches £1.7 billion, up £100 million from 2014 ?
- One in six (16%) who separate also buy a new home, spending an average of £144,600 ?
- Affordability issues mean 51% of those who separate turn to the rental market, at an average annual cost of £7,519 ?
- Legal fees associated with divorce more than double, from £1,280 in 2014 to £2,679 ?
- Money matters take an average of 14.5 months to settle after a split – three months ?longer than in 2014.
Alongside the impact of the many one-off costs resulting from divorce or separation, the breakdown of a relationship can also affect where people live afterwards and their ability to get back on the housing ladder after selling a shared property. Nearly half (46%) of home-owning couples sell their property leading to both partners having to find a new home, in addition to those individuals who move out whilst their partner remains in the former joint home.
One in six (16%) buy a new home following separation, with an average cost of £144,600 per person, rising from £94,100 in 2014. This is significantly lower than the average UK house price (£226,185), suggesting the likelihood that people are downsizing to a smaller property.
More than half (51%) move to the rental market after their divorce or separation, spending an average of £7,519 each year on rent. While individual circumstances will differ, the average time spent as a tenant post-separation is 4.7 years, with almost one in five (19%) renting for more than a decade after splitting with their former partner.
With house prices continuing to rise across the country, renting post-separation could become a more permanent circumstance for many people. Of those currently renting as a result of their split, seven in ten (70%) feel that they will be unlikely to buy a property in the future.
For a significant proportion of separated couples (16%), affordability remains such a concern that they remain living together in the same house because they can't afford to move. This is especially prevalent among former couples in London (28%), where property prices are far higher than the national average, with two fifths (39%) having carried on this arrangement for longer than three months.
Aviva's findings also illustrate how people are compelled to make changes to supplement a potential drop in household income as a result of divorce or separation. Nearly one in three (31%) of those who have split say they have dipped into their savings for financial support, while over a quarter (26%) admit using credit cards for this reason. Close to a quarter (23%) have also borrowed from friends and family to tide them over.
For the report, click here.
12/1/18