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Divorce Day 2025: How to keep your finances safe after separation

Divorce Day 2025: How to keep your finances safe after separation
Matt Browning
Written By:
Posted:
06/01/2025
Updated:
07/01/2025

Today is the first Monday of the year, a day that is known as 'Divorce Day', when family lawyers receive a spike in queries about ending marriages.

Last year, many couples shifted their separation into the spring in a bid to battle the cost-of-living crisis and the expense of the festive period, but the tradition has continued into 2025.

Much like last year, there are financial constraints delaying divorces from going ahead.

Nearly two-fifths (59%) of married couples who want to split up cannot do so due to their financial situation, according to Co-op Legal Services and Funeralcare.

Another reason holding couples back from ending their marriage is due to having children, which is the case for 60% of Brits, while the average length of married life is seven years. On average, couples will be together for four-and-a-half years before tying the knot.

Most couples filing for divorce will be doing so for the first time and it can be an expensive process in many ways.

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As well as emotional distress, there can be just as much financial stress to consider, according to a personal finance expert.

Kara Gammell of MoneySuperMarket said: “Navigating the process of separation and divorce is often emotionally and financially difficult, with lots to think about and do.

“Changes to the legal status of your relationship won’t affect your credit score. However, if you and your former partner had financial agreements in both of your names – for example, a mortgage, loan or bank account – your credit reports will be linked through what is known as financial association.”

Gammell added: “This means that if your ex-spouse has missed payments, defaults or other negative information, it could impact your credit report – even after you separate.

“To avoid this, make a note to remind yourself to submit a request to be financially disassociated from your former partner when any shared finances or credit agreements end. This will help protect your long-term financial future.”

The comparison site has outlined four considerations to protect your finances if you are going through a divorce.

Tips to protect your finances after divorce

1. Add separation to credit report

If you’ve taken out shared finance such as a mortgage, loan or joint bank account with your ex-partner, you can request to be financially dissociated when the shared credit agreement has ended.

If you find that you are still linked, you can ask the credit reference agencies to amend their records, so they show you’re financially disassociated from your partner and their financial decisions won’t impact your credit report.

You’ll need to provide proof that you’re no longer financially linked to your former partner; for example, a letter from your bank showing that your account is now held in your sole name rather than jointly.

You don’t have to wait until you’re officially separated or divorced to financially disassociate yourself from your ex – you can do it as soon as all joint accounts are closed and any mortgage or other credit arrangements are no longer held in joint names.

2. Shared accounts that are still open

If you have joint accounts or loans with your ex-partner, you should contact your bank or loan provider to explain your situation. This is especially important if your break-up isn’t amicable, as you’re each liable for the entire debt, as with any joint loan.

Ask your bank to change the way the account is set up so that both of you must agree to any money being withdrawn, or to freeze it. But bear in mind that if you do this, both of you must agree to unfreeze it. This might be a problem if your ex-partner doesn’t want to cooperate.

If you have a credit card account and there’s a second card for your ex-partner, you’ll be responsible for paying for their spending as well as yours.

You can either ask your ex-partner to give you the card back or contact the card company and find out what you need to do to block the card or remove your ex-partner from your account.

3. Legal cost assistance

If you are keen to reach a formal agreement with your ex-partner about children and/or finances, but are struggling with the cost of legal advice, a mediator can help. It’s usually quicker and cheaper than asking a court to decide for you.

You might qualify for legal aid for mediation in England and Wales if you’re on a low income or not working.

Legal aid can cover the cost of sessions until you reach an agreement, the document recording everything you’ve agreed and/or the cost of asking a solicitor to turn the document into a legally binding agreement.

It will also cover the cost of the introductory meeting and the first session for your ex-partner, even if they don’t qualify for legal aid in their own right.

The mediator will apply for legal aid on your behalf. If you qualify, the Government will pay them directly.

4. Insurance policies

Life insurance is there to protect your family in the event of your death, while income protection and critical illness cover provide financial support if you become too ill to work. After a relationship ends, it’s crucial to update these policies to ensure your family remains fully protected.

If you purchased your policy while married but are now divorced, you might need to increase the sum insured to reflect your new circumstances. Additionally, if your ex-partner is still the named beneficiary, they will receive the payout if you die while the policy is active, even after divorce. To prevent this, contact your insurance provider to update the beneficiary details, removing your ex-spouse.