Rebuilding Your Finances After Divorce or Separation
Ending a marriage or long-term relationship is not just an emotional journey—it often brings significant financial upheaval. From revisiting joint accounts to reassessing long-term plans, untangling finances can feel overwhelming. However, with the right guidance, it is possible to regain clarity and move forward with confidence.
In 2022, there were 80,0571 divorces in England and Wales, highlighting just how many people face this challenge each year. If you're in this position, you're not alone—and seeking professional advice can make all the difference.
In this latest article in our series on life stages, we bring you some steps to consider as you revisit and adjust your financial plans.
Where to Start: Understanding the Financial Landscape
The first step is to get a clear picture of your current financial situation. This means gathering all relevant documents, including bank statements, mortgage agreements, pensions, and investment records. It may also involve valuing joint assets, such as property or businesses.
If possible, try to maintain open communication with your former partner to facilitate a fair division of assets. However, if discussions become difficult, seeking legal advice or mediation can help protect your interests.
Key Areas to Revisit
1. Joint Accounts and Debts
Close or separate joint accounts to prevent future liabilities. Ensure any joint debts are addressed and, where necessary, seek to transfer balances into individual names.
2. Mortgage and Property
Decide whether to sell or transfer ownership of shared property. This decision will depend on affordability, living arrangements, and long-term plans.
3. Pensions and Investments
Pensions can be one of the most valuable assets in a relationship. Consider how they will be divided and whether pension sharing orders are necessary. Review your investment portfolio to ensure it aligns with your new financial goals.
4. Wills and Insurance
Update your Will to reflect your new circumstances, ensuring that your assets are distributed according to your wishes. Similarly, review life insurance policies and adjust beneficiaries as needed.
5. Budgeting and Future Planning
Create a new budget based on your income and outgoings. This will provide clarity on what is affordable and help you plan for future goals, whether that involves saving for retirement, buying a new home, or investing in personal development.
Seeking Professional Advice
A financial planner can help you navigate the complexities of separation, offering tailored advice to suit your specific needs. From restructuring debts to rebuilding savings, professional support helps you stay on track.
Remember, this period of change is also an opportunity for growth. By taking proactive steps, you can establish a stable financial foundation for the next chapter of your life.
If you’re unsure where to begin, please don't hesitate to reach out. Having an expert by your side can make the process more manageable and less stressful.
The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
Wills involve a service which is separate and distinct to those offered by St. James's Place and are not regulated by the Financial Conduct Authority.
1Office for National Statistics February 2024.
Further Reading
Additional articles in this series include:
- How much money do I need to see a Financial Adviser?
- Starting Work: Kickstart Your Financial Future
- Taking a Joint Approach to Finances
- Navigating the Home-Buying Journey
- Planning Financially for Parenthood
- Planning for the Unexpected
Accreditation
