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The Cost of Living Crisis: Families are feeling the pinch
As the cost of living crisis continues to escalate, with rising interest rates and energy prices, this is having a serious impact upon unhappy relationships that have broken down.
Escalating energy prices, increasing food and fuel costs, together with stagnating wages, all compound the pressure on families feeling the pinch. The situation is placing additional pressure upon relationships when people are already struggling to cope following the aftermath of the coronavirus pandemic.
Money worries can amplify difficulties that already exist in relationships. Covering increasing costs from finite income resources is an unwelcome challenge facing families at this time.
The cost of living crisis is having an impact upon relationships, in a number of ways. For some people they feel that they have no choice but to stay together, even if their relationship has broken down. In usual circumstances, they would separate or issue divorce proceedings. Instead, people feel that from a financial perspective, they have no option but to stay together. People simply cannot afford the cost of running two households, and the cost this entails.
With the huge increase in rent, energy costs and household bills, it is simply unfeasible to leave the family home, regardless of how unhappy a person may be in their relationship. In these circumstances, it may be wise to enter into a Separation Agreement which makes it clear who owns existing assets, how it is intended that the finances are to be divided on any future divorce and future financial responsibilities. This would provide certainty going forward, particularly if a divorce appears inevitable at some point in the future.
For people already going through a divorce, the huge increase in the cost of living means it is even more crucial to take an extremely careful look at the level of monthly outgoings and affordability before an overall financial settlement is reached. Careful consideration needs to be given to projected future living costs and a comprehensive budget prepared, to avoid financial difficulties following a divorce. Consideration also needs to be given as to whether ongoing monthly payments (spousal maintenance) should form part of the global financial settlement on divorce.
The withdrawal of mortgage products by lenders and the increase in interest rates is also a cause for concern for divorcing couples. This may well have a negative impact upon securing alternative accommodation if the former family home is to be sold. As a consequence of this financial situation, we may see divorcing couples considering a deferred sale of their property until the financial situation improves.
How can Rachel help you?
Senior Associate Solicitor Rachel Baul specialises in high net worth financial cases, involving business and trust assets, in both the U.K and overseas. To find out more contact Rachel Baul on 01423 502211 or via firstname.lastname@example.org 1701787848