Achieving a fair resolution of all the financial issues surrounding divorce or the dissolution of a registered civil partnership can be highly stressful. Alongside wanting to resolve these effectively and affordably you may also be worrying about how you will achieve the fairest division of your family assets, how to deal with any requirements for continuing support or perhaps even how you will manage to make ends meet in the future.

UK couples are spending more than £44,000 on average when they divorce or separate, totalling £5.7 billion per year across the nation. A new study from Aviva reveals the hidden cost of divorce as £21,979 per person or £43,958 per couple.

The figures show a 57% increase since the study was last carried out in 2006 when the cost of divorce was around £28,000. While the data suggests legal fees for divorce have actually fallen over the period ? from £1,818 to £1,280 ? with many opting for cheaper online services, additional costs such as moving house and child maintenance payments mean the overall price of separation has soared.

Added extras

As well as considering the core costs associated with a break-up, the study also looked at added extras that many people buy following a split. The research suggests that four out of ten newly separated people splash out on items to treat themselves.

For example, the study found one in eight people (13%) took a holiday to celebrate their newly single status at a typical cost of £1,925, while the same (13%) treated themselves to new technology, shelling out an average of £1,292 on gadgets and gizmos.

Four out of ten respondents said they were financially worse off following their separation, and more than half of couples (53%) took longer than six months to settle financial matters. The typical time to settle was 11.5 months, but one in ten couples (11%) said the process took more than two years.

With this in mind, it's perhaps no surprise that 36% of people surveyed said they'd prefer to stay single in the future!

Financial impact

The financial impact of a separation is also clear from people's behaviours when a relationship breaks down. Almost a third of couples (29%) said they tried to reach an amicable settlement to save on legal fees, while one in ten said they effectively separated but continued living together for several months because they couldn't afford to live apart immediately. A further 6% initially put off getting a divorce because of the costs involved.

Women were more likely than men to make lifestyle changes to supplement their income following a separation. One in eight women (13%) said they worked longer hours or took a second job following a break-up, while one in ten who didn't work before the split got a job. Women were also more likely to use short-term fixes to make ends meet after a separation: 27% of newly single women dipped into savings compared to 16% of men, while 23% relied on credit cards, compared to 14% of men.

Two thirds of couples who are married or co-habiting have some shared finances, so these arrangements can take some time to unravel if a relationship unfortunately breaks down. Beginning again following a separation can be a daunting time, not to mention a busy one, but it's crucial that newly single people review money matters when their circumstances change.

Facing the facts:

Interviewees were typically with their partner for 10 years and eight months before separating, although one in ten (9%) were together for less than two years

The average age at separation in the study was 38 years and two months

Two thirds (66%) of separating couples had joint finances: four in ten of these shared all finances, while the remaining six in ten had some shared and some separate

One in five women took out protection insurance (such as life cover) after separating, compared to one in ten men, but a quarter of respondents said they didn't have life cover following the split (25%)

One in eight separated women (12%) said they have no pension/savings plans as they were relying on their partner to fund their retirement

One in ten respondents (10%) said they would be significantly worse off in their retirement as a result of their break-up

Four out of ten women (42%) said they were worse off financially as a result of their divorce/separation compared to 33% of men. Four out of ten men (39%) said they were actually better off, compared to 29% of women

More than a third (36%) of respondents said they would prefer to remain single following their break-up, but 25% would marry (again)

Reviewing money matters
Beginning again following a separation can be a daunting and emotional time, not to mention a busy one, but it's crucial that newly single people review money matters when their circumstances change. If someone becomes the sole income earner for their family unit, it's important they think about what they might do if they were unable to work, for example, through illness or injury. Protection insurance ? such as life insurance, critical illness cover or income protection ? can provide that all-important peace of mind, so people can start on a firm footing as a new chapter begins.

Concerned for your own financial security?
The resolution of finances can often be an emotional rollercoaster and will be a different experience for each person. Everyone is understandably concerned for their own financial security and that of their family and so it is not unusual, therefore, for the financial settlement to end up being the key focus of attention. To discuss your situation please contact for further information.

Source:
Latest figures from the Office of National Statistics show that 118,140 marriages and 794 civil partnerships ended in England and Wales in 2012, while 9,700 marriages and 67 civil partnerships ended in Scotland in 2012/13 according to latest figures for Scottish civil law cases. This equates to 128,701 divorces/dissolutions annually, relating to 257,402 people.
Average cost of divorce is based on total costs according to the study, multiplied by the proportion of people who spent on each item, divided by the number of divorces/dissolutions across the UK annually.