News release

Date: 16th August 2010

Divorce rate slumps but divorce costs continue to rise

Divorce is at its lowest level since 1979 but the number of costly divorce-related settlements in court has increased during the economic downturn, according to legal publisher Sweet and Maxwell.

August 16 2010 - Divorce is at its lowest level since 1979 but the number of costly divorce-related settlements in court has increased during the economic downturn, according to legal publisher Sweet and Maxwell.

While only 136,026 divorces were granted in 2008, the lowest for 30 years, the leading publishing expert says more cases than ever are being fought out in court as couples battle over the size of maintenance, lump sum payments and splitting pension pots.

The grim findings are reinforced by free debt solutions company Payplan which says divorce debt inquiries to its national helpline have escalated over the past two years.

“The divorce rate may be down but this only paints half the picture,” explained John Fairhurst, managing director at Payplan, the free debt solutions specialists. “More couples are taking their disputes to court but without realising the full financial consequences of doing so.”

The average cost of divorce today is £13,000 – a lot of money involved in court appearances, solicitors’ fees, not to mention the emotional cost. And the spending doesn’t necessarily stop there, warns Payplan.

Before considering a divorce settlement, the national provider suggests couples weigh up the cost of court implications and the longer term costs of separation.

“Many couples don’t think beyond the court case but the inevitable change in living style will bring it’s own associated costs,” added Mr Fairhurst.

Payplan says its top five potential debt risk factors which all couples should consider are:

* Income drop – living alone doesn’t mean food and utility bills naturally fall by 50%; there’s a deposit for a house or first month’s rental deposit to find, possibly new furniture, and the list goes on.

* Treating the children – minimising the stress for children in a break-up very often means over compensating with expensive treats including holidays, toys, days out.

* Boost esteem – spending on luxuries can boost self-esteem after going through a demoralising divorce process but it’s not good for the bank balance.

* Change of lifestyle – life as a singleton can mean more socialising and going out with friends which is great for getting over things but costly.

* Sole name – while together you might both pay off outstanding debts; once divorced, if the debt is in your sole name, it’s you who will have to foot the entire bill.

“Divorce is costly and is a last resort but for some couples it is the only plausible step forward,” added Mr Fairhurst. “It is our job to ensure people in these situations, who find themselves in debt through divorce, are aware of all the implications. This way we can help them manage their debt and at the same time, live a comfortable life.”

One positive trend change is the fact that more couples appear to be recognising they have money issues much earlier and seem prepared to do something about it.

Mr Fairhurst agreed: “What is encouraging is that more and more people are realising the longer term implications of divorce and are contacting us way ahead of actual divorce day. By planning ahead, we can help them to manage their debt more effectively, giving them as much flexibility as possible.

“We’re not here to judge, we’re here to assist at a vulnerable time in a person’s life. Nobody wants to be in debt and it’s our job to help guide people out of it.”

The Payplan free helpline is 0800 280 2816, or to place a confidential inquiry online, visit: www.payplan.com



Note to editors

Payplan is one of the UK’s leading providers of free debt solutions. Its award-winning service helps over 100,000 people in financial difficulties every year. With no fees to pay, it is the first choice for more and more consumers wanting help with budgeting, loans and credit card bills, repossession and mortgage arrears.

Sweet & Maxwell says the rise in legal disputes over the size of maintenance and lump sum payments, and the splitting of pension pots, has largely been restricted to couples without children. In 2008, the first full year of the credit crunch, financial settlements were contested by 28% of childless couples, against 24% in 2006.

For further information please contact:
Dawn Strange
dawn[at]mediamatters-pr[dot]co.uk
01733 371363

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