Expert reveals what Northampton couples should do to avoid 'financial Armageddon' this Divorce Month

A finance expert has warned couples thinking or going through the process of a divorce to first seek money advice from a trusted source or potentially face ‘financial armageddon’.

The stark warning comes as January marks Divorce Month, the time of year when couples are most likely to start the process of splitting up.

The UK’s first ethical finance firm, Path Financial, says those in a relationship and thinking of cutting ties with one another should first look at getting advice on their money – spiralling costs due to the cost-of-living crisis mean you need to be sure that you get a fair settlement that will see you into the future.

Rowan Harding, financial planner at Path Financial, says: “It’s so important for couples to get finance advice as well as legal advice when thinking of separating so you know your rights before you part ways.

“Make sure you choose an approved financial planner, so you know the advice you’re getting is up to date.

“Divorce and separation can be a stressful experience to go through so making sure you’re on top of everything is crucial for a smooth, pain-free process.”

Advice sought could include finding out what products are available and explaining the process of transferring assets. A financial and retirement plan could also be created to provide clarity and reassurance.

Rowan adds: “For one spouse who doesn’t earn as much as their other half, it’s particularly imperative they seek financial advice so they can secure their financial future.

“People can easily end up with fewer assets than they are entitled to because they have not gone through a financial advice process.

“And it could get rather messy in terms of who is owed what if you don’t seek advice. With rising costs, the last thing you want is for a bad settlement now, which with rising costs could mean financial armageddon further down the line.”

Data from the Office for National Statistics shows there were 28,865 applications made to divorce in the period of January 2023 to March 2023. That was higher than the April 2023 to June 2023 period, when 24,624 applications were made. And then the July 2023 to September 2023 period, when there were 27,290 divorce applications. The figures for the period for October 2023 to December 2023 have not yet been released.

The Government changed divorce laws in 2022 to remove the requirement to apportion blame for the breakdown of their marriage. It said this was so couples could focus on ‘practical decisions’ such as looking at their finances.

But according to recent research by Legal and General, only 7 percent of couples have considered seeing a financial adviser as part of their divorce break-up.