In the most recent survey carried out by The Office for National Statistics in March 2022, 87% of adults reported that there had been an increase in their cost of living. This is being exacerbated by the current rate of inflation, now over 10%, which is the highest it has been in over 40 years. As a result of this, many middle to low-income families are going to struggle to meet their everyday expenses, such as rent, utilities, food and clothing.
Going through a separation and financial remedy proceedings is almost certainly going to cause financial hardship to many families, without the added pressure of the cost-of-living crisis.
This is because the income previously used to support one household is now being split to try and meet the expenditure and support required for two households.
The outcome of a financial settlement must take into account the fact that both parties need to able to meet their own housing needs as well as being able to financially provide for themselves and any children of the family.
How does this affect financial proceedings?
The first step of any financial proceedings is for both parties to provide the other with full financial information. As part of this process parties are required to disclose their current income and expenditure along with what they expect it to be in the future. This means that it is likely that future expenditure is going to be higher as it is expected that everyday living is going to become increasingly more expensive.
It is therefore a definite that the cost of living crisis is going to affect financial remedy proceedings as it is going to increase the amount that is needed to meet each party’s future needs.
In addition to this, separating couples need to disclose whether they have any current debts for example a credit card. There is a duty of ongoing disclosure so if expenditure increases or there are new debts incurred by the parties because of the economic crisis, financial information provided can be amended to reflect this.
This means that if the cost-of-living does impact your finances negatively, and you have concerns that you are going to suffer unjust financial hardship because of your separation, it will be taken into consideration by the courts when deciding what will be a ‘fair’ settlement for your circumstances.
“Participating in divorce proceedings and trying to negotiate a financial settlement is stressful enough without the added pressure and worries of how the cost-of-living crisis is going to affect you. Here at Sinclair Law, we are here to support you throughout this process and achieve the best possible outcome for your circumstances.” – Lucy Hart, Solicitor and Director.
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