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No-Blame Divorce To Push Couples Into Pension Poverty

New laws making no-blame divorces much easier for unhappy couples are likely to prompt a surge in marriage break-ups and pension poverty over the coming years.

The latest official figures show 107,000 divorces took place last year, but the figure is likely to rise, according to a report from pension provider Aviva.

The courts reported a 50 per cent rise in divorce applications while processing 3,000 cases under the new rules in the first week of the new regime. At some times, lawyers could not file documents online because the courts web site was busy.

And pension poverty often follows a split because battling couples fail to consider retirement money one or both have saved when sorting out divorce settlements.

Couples are distracted from fairly dividing their household wealth because they are sorting out children and somewhere to live, often while starting a new relationship.

Family finances are often the last thing on a new divorcee’s mind during these difficult times, but the impact of divorce on personal finances can last for a lifetime.

Struggle To Pay The Bills

UK household wealth is estimated at more than £15 trillion, with private pensions grabbing the largest slice of the pie – around 42 per cent of household wealth or £6.4 trillion.

But one in three divorces fails to claim their partner’s pension savings, and one in 12 don’t have a pension and are counting on their partner to fund their retirement. This is despite divorce making one in five people financially worse off in retirement, says the Aviva report.

Divorce also hits couples at a financially sensitive time. The average age of a divorcee is 47 years old for a man and 44 for a woman, which means couples have had plenty of time to save a significant amount of money.

Many couples struggle to maintain their lifestyles after a divorce and dip into their savings to help pay the bills or fund a few treats for the family.

After divorce, a third of former couples said they topped up their income from savings. Another one in five paid for day-to-day living costs on a credit card. A similar number borrowed from family or friends, while one in seven resorted to selling their belongings to make ends meet.

Underestimating The Value Of Pensions

Others resorted to more drastic financial solutions to balance family budgets.

One in eight had to get a job, even though they had not worked before splitting with their partner. One in ten working divorcees took on a second job.

Another one in eight admitted they could no longer afford pension savings, cutting back or cancelling contributions.

Alistair McQueen, Aviva’s head of savings and retirement, said: “The breakdown of a marriage is often one of the most traumatic and stressful events anyone can go through. Divorce can also be a costly experience, often including legal fees, a new home, a new car and new childcare costs. So, it’s perhaps predictable that so many need to rely on savings or credit cards for support during this time.

“It’s critical that, as part of the separation process, couples take time to think about and discuss one of their single most valuable assets, their pension.

“It’s common that one party will have significant pension provision, and the other party may have little or none. Clearly, this could be a relevant factor in any divorce. There are several options available to the family court when dealing with pensions at divorce – pension sharing, earmarking and offsetting against other assets5. It can often be a complex issue so, as well as hiring a family lawyer, it would be advisable for couples to contact a financial adviser to walk them through the pension valuation and financial process. You mustn’t underestimate the value of pensions at this time.”

What Is A No-Blame Divorce?

Justice minister Dominic Raab is convinced that the new no-blame divorce laws will remove the conflict surrounding an ended relationship.

He says the Divorce, Dissolution and Separation Act (2020) represents the biggest shake-up in divorce law for more than half a century.

Instead of couples blaming each other for their marriage breakdown, the rules aim to make them focus on arrangements for children and their finances.

Until April 6, unhappy partners had to prove the other’s unreasonable behaviour or adultery or live through at least two years of separation before the courts would grant a divorce, even if both sides agreed to the split.

Now, a partner or couple states their marriage is irretrievably broken down to start a divorce. Then, after at least 20 weeks, they can ask the courts for a conditional divorce order.

Raab said: “The breakdown of a marriage can be agonising for all involved, especially children. We want to reduce the acrimony couples endure and end the anguish that children suffer.

“That’s why we are allowing couples to apply for divorce without having to prove fault, ending the blame game, where a marriage has broken down irretrievably, and enabling couples to move on with their lives without the bitter wrangling of an adversarial divorce process.”

The minister added that the government is still investigating further law changes relating to how assets like pensions are divided.

How A No-Blame Divorce Works

The law change introduced a new way for the courts to look at divorce.

  • No-blame concept – The need for evidence to prove unreasonable behaviour or adultery is removed and replaced with a statement of the fact that the marriage has broken down, which can be made by one or both partners
  • Partners cannot block the divorce once that statement of fact is filed with a court
  • Couples must focus on making arrangements for children and agree on finances in the 20 weeks before a conditional order of divorce is granted
  • The language of divorce becomes more amicable, replacing Latin terms like decree nisi with the conditional order

The partner applying for the divorce must pay a court fee of £593.

No-Blame Divorce FAQ

How long does a no-blame divorce take?

A no-blame or no-fault divorce should take around 26 weeks or six months. The conditional order is granted after 20 weeks, while the final order to end a marriage comes about six weeks later.

Do I need a solicitor to divorce?

No, you do not need a solicitor and can self-manage your divorce. However, it’s wise to speak to a lawyer and a financial adviser to help sort out personal and financial arrangements.

Can I stop my partner from divorcing me?

Under the new rules, a partner can no longer contest a divorce.

Who can get a divorce?

Married couples and civil partners can divorce under the new rules.

What were the former five reasons for divorce?

Under the old divorce rules, the five grounds for splitting up were:

  • Adultery
  • Unreasonable behaviour
  • Desertion
  • 24 months of separation (with consent from both partners)
  • 60 months of separation (without a partner’s consent)

How much does a no-blame divorce cost?

Each applicant pays £593 to lodge the no-blame divorcce papers before a court. So, if one applicant applies, the cost is £593 and if both apply, the amount doubles to £1,186. This does not include the cost of taking legal, financial or other professional advice.

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