The current economic instability has thrown us into yet another set of unprecedented times, after just coming out of a 2 year pandemic. It has created worry for many, with the increase of costs from food to Petrol, Diesel, Gas and Electric. These are troubling times for everyone, however for those already in the midst of separation and divorce, the Cost of Living Crisis will potentially impact upon Financial proceedings and I have outlined a few of the main issues below, to help make sure that you are working from a realistic and accurate set of circumstances.
Form E’s and Income and Expenditure Schedule’s
Whilst your income will unlikely have changed as a result of the impact of the last few months and weeks, with inflation soaring and substantial hikes in interest rates, coupled with the instability of the markets, it is pretty obvious to all that your income won’t stretch as far as it did a few months ago.
You may have prepared your Form E earlier in the year, and in doing so you will have produced a schedule of your outgoings for now and your predicted future outgoings. This will now require revisiting and potentially updating to take into account the changes in the costs of living. This is really important, especially if you are depending on spousal maintenance as you now need more than you had previously thought, to deal with the increase in household and travel costs.
Pensions
As a result of the events of recent weeks, there may have been a change to your pension. If you have had a report commissioned for the purposes of pension sharing recently, it may be prudent to take advice to ascertain if there has been any material change to the pension provision.
Property prices
There is a lot of speculation as to the housing market, and what will happen over the next few months. If you had a valuation conducted in the summer for example, that might now have changed or may change over the coming months, and so you may want to think about an updating valuation.
Mortgage Capacity
With the recent hike in interest rates, the mortgage companies pulled many of their fixed rate products. Whilst products are now returning to the market, it would appear that the interest rates being offered are much higher than they were just a few weeks ago. If you are in the middle of proceedings or negotiations, you may want to check when your current fixed rate comes to an end. If you have agreed on the division of equity upon sale of your property, and you are looking to purchase, if may be prudent to check the affordability of your mortgage capacity alongside all the other increases in daily costs. If you have a mortgage offer in place, check how long this lasts for, as if it runs out you may be faced with a more expensive deal. In order to look at this you need to consider taking fresh independent financial advice.
Conclusion
Divorce and dealing with the matrimonial finances are challenging times for all parties. To add financial instability into the equation increases the stress and anxiety for all concerned. It is important that you re-evaluate your assets alongside your outgoings to ensure that any agreement is fair, realistic and affordable.
Here at Boardman Hawkins and Osborne we are here to help with the challenges of reaching agreement of your matrimonial finances.
We understand these are trying times and many of us have less in our purse than we did 12 months ago. Don’t put your head in the sand – if you are struggling, reach out for help. As well as the above, look at practical help. Check if you are entitled to any benefits, or an uplift to benefits you already have , check if your children are entitled to free school meals, and locate your local food bank to see if they can assist. Don’t be afraid or embarrassed to shout for help
In light of this economic crisis, we are offering initial fixed fee meetings starting at a lower rate of £200.00 plus VAT for an hours meeting with a follow up letter setting out our initial advice,
If you would like more information please do not hesitate to contact us at BH&O on 01235 425500
Helen Bishop, Consultant Solicitor