Suddenly single: how to uncouple your finances if your relationship ends
So you’ve decided to separate from your partner – now what? While there’s lots of advice available on what to ask for in a divorce settlement, what are you supposed to do in the immediate days and months following the spilt? And what does the end of a long-term relationship mean financially for those who were not legally married?
Here’s how to sort out your finances to soften the blow of any separation
Get the support you need
Separating from a partner could have a big impact on your finances, especially if you relied on their income during your relationship.
If your marriage or civil partnership ends, you could ask for financial support, known as “spousal maintenance”, from your ex-partner as soon as you separate.
If you weren’t married or in a civil partnership, you’ll have to share the costs of looking after any children you have together, but you don’t have to support each other financially when you separate.
You don’t have to go to court to arrange financial support.
If possible, it’s cheaper and easier to come to an agreement between yourselves. This is known as a “voluntary arrangement”.
If you’re struggling to work out maintenance payments by yourselves, you might be able to reach an agreement through mediation.
Mediation starts with a “mediation information and assessment meeting” (MIAM).
At the MIAM you’ll find out what mediation is and how it can help you.
In March 2021, the government launched a Family Mediation Voucher Scheme for parents looking to sort out childcare arrangements without going to court – and it could be worth up to £500.
You may be eligible for the voucher if there is:
- a dispute or application about a child
- a dispute or application around financial family matters relating to a child
It’s first-come, first-served and only mediators authorised by the Family Mediation Council (FMC) are taking part in the voucher scheme. Click here to find out more.
Only once you know your money situation can you have a proper financial conversation with your ex
Create a budget
Just like you wouldn’t go on a road trip without planning your journey, make sure you have a clear view of your money before you start making big decisions. Keeping a roof over your head is more than just paying rent or your mortgage – there’s council tax, energy bills, home insurance and general maintenance to consider too.
Download a spreadsheet online which allows you to detail all your income and outgoings, whether they are weekly, monthly or annually.
Once you know where your money is coming from, how much there is, and where it is all going, you’ll be better placed to have any money conversation with your ex.
Are you eligible for benefits?
Many government-backed benefits are based not only on your individual wage but also on total household income. So, if you live alone, this could mean that you are eligible for assistance.
This is especially important if you have children as there are several tax breaks and benefits which are in place to help single parents meet the cost of childcare.
For this reason, it’s worth double-checking your eligibility for benefits, even if you don’t think you’d be entitled to receive anything.
To see if you are missing out, try Turn2Us’ handy online benefits calculator tool.
Cut the cost of your council tax
Make sure that you are not paying more than you need to on your council tax bill.
These unavoidable bills are calculated on the assumption that two adults live at a property, so if you’re the only adult in your household you’ll get 25% off your Council Tax bill.
You can apply for a reduction from your local council here.
Don’t forget your accounts need to be separated too
If you and your partner are splitting up, it’s likely that you’ll have some joint finances, such as bank accounts or loans, to sort out.
If the relationship breakdown was not amicable, it’s a good idea to contact your bank or loan provider to explain what has happened.
With any joint loan such as a mortgage or overdraft, you are each liable for the entire debt.
If you don’t keep up the joint payments, not only could you lose your home, but it could damage your credit rating, which could make it harder for both of you to borrow in the future.
If you have a credit card account and there’s a second card for your ex-partner, you will be responsible for paying for their spending as well as yours.
Sharing a bank account or credit card with someone you are splitting from can be bad news if you don’t trust them or they are bad with money.
You could ask your bank to change the way the account is set up so that both of you must agree to any money being withdrawn, or you can request to freeze it.
Bear in mind, though, that if you freeze the account, both of you must agree to “unfreeze” it. This might be a problem if your ex-partner doesn’t want to co-operate, so tread carefully!
Similarly, make sure you stop any wage payments going into your joint account if you’re worried that your ex-partner won’t agree to you taking out this money.
When it comes to any savings, hopefully you’ll be able to agree on how you will divide any that you have built up together.
Cash in a joint savings account belongs equally to two spouses or civil partners, otherwise it belongs to the person who originally paid it in.
Change your insurance
If you have a home insurance policy in both your names and, for example, your ex-partner is moving out, you might have to ask them to confirm that they are happy for their name to come off the policy.
Similarly, if they are a named driver on your car insurance, you might ask to have them removed if they won’t be driving your car in the future.
The Vulnerability Registration Service can automatically decline any applications for financial products made in your name
If you are in any way worried about your ex having access to your credit, sign up to the free Vulnerability Registration Service, which can automatically decline any applications for financial products made in your name.
Alternatively, those who think they might apply for credit in future can set up a referral flag, which means they must give verbal consent before any applications can be approved.
There is no cost to register, and your preference and details will be held for at least three months. After this you can ask to have your information removed if you feel you are no longer at risk.
3 things to do right now...
Download a money management app that analyses your spending so you know exactly where your money is going.
Consider income protection in case you get sick or injured and can’t work and wouldn’t get sick pay. You could receive 50-70% of your salary, which could keep you afloat should things go wrong.
Write down your plan so that you can see exactly what steps you need to take control of the situation. Send yourself a copy via email so that you don’t lose it.
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Don’t forget that while you may think that this article is brilliant, it is intended for information purposes only and should not be mistaken for financial advice or recommendations.
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