Financial stress in the economy due to Brexit and interest rate rises is leading less settlement money in divorce UK cases, says private client law firm Wilson.
The number of court disputes over money between divorcing couples has risen 13 per cent to 4,120 in 2017-18, the highest level in the past decade and up from 3,650 in the previous year. Wilsons explains that increasing numbers of divorcing couples are resorting to court to settle money disputes in part because of heightened financial stress in the economy. Interest rate rises and Brexit uncertainty has hit asset prices, including shares and house prices, often the most significant shared asset between divorcing couples. The lack of clarity over Brexit’s impact on the economy has created more job insecurity, adding further pressure to people’s future financial planning and making them more willing to ‘fight’ for their share of marital assets.
Individual finances have also often still not fully recovered from the financial crisis with real incomes stagnating. A recent study revealed that on average people’s real annual wages in UK were £800 lower in 2018 than in 2008. Jacqueline Fitzgerald, partner at Wilsons, says ‘shrinking assets values mean some divorcing couples are going to get less money than they expected, that often leads to disputes,’ adding ‘divorcing couples are more willing to fight over money if they think they will potentially be less well off in the future.’ Wilsons adds that in 45 per cent of financial settlement divorce cases with at least one hearing, in the last year, neither side had legal representation. As a result of cuts to Legal Aid in 2013, more individuals are now representing themselves, however, they often lack the legal expertise and knowledge to avoid going to court.