Five ways to protect your finances during and after divorce

Finances can cause a lot of worry during a divorce or separation, and there’s no denying that they require some careful thought. But when you’re dealing with raw emotions and feeling stressed, it can be tricky to work out your priorities.

To simplify your divorce to-do list, we share five ways to protect your finances during and after your divorce. They’ll help give you peace of mind and financial security now and in the future, so you can look forward to the new beginnings that come with life after divorce.

1. Get a credit check

Many couples share finances like mortgages, loans and credit cards. If this applies to you, your ex-partner is likely listed as a financial associate on your credit report – and will remain so until these connections are officially removed.

While your marital status isn’t something you’ll find on your credit report, and divorce itself won’t impact your credit score, financial associations can affect the outcome of credit applications.

The good news is that your credit report lets you see all your financial ties in one place. This is a big help when dividing assets and responsibilities during separation – more on this later. For example, you might find joint accounts you'd forgotten about or discover that you're still financially linked to your ex-partner through old credit agreements.

Even if your split is amicable, it's a good idea to monitor your credit report regularly during and after divorce. Because any missed payments or money difficulties your ex-partner experiences could impact your own credit health if you're still financially linked. This could influence your ability to rent a property, secure a mortgage or get credit in your own name as you start your new chapter.

Checkmyfile offers the most detailed credit report out there. It combines your information from the UK’s three main credit reference agencies – Experian, Equifax, and TransUnion – so you know where you stand. Sign up for a 30-day free trial, then pay £14.99 a month. Cancel online anytime.

2. Split your money and property fairly

During a marriage or relationship, couples build up personal and joint assets such as property, land, savings and pensions. When you separate, one of the most overwhelming jobs is to work out how you’re going to split these assets fairly.

The first thing you have to do is work out what you collectively own. This is called financial disclosure. In practice, this means putting any property, pensions, investments and debts in a spreadsheet, so you can see everything you each have. Legal services such as amicable can help with this process, as it can get complex.

Next, you’ll need to agree on the fairest way to split everything you own. There's no defined formula for splitting money and property, though the starting point is usually 50/50. If one of you has a greater need, for example because you are housing the children or earning a lot less, then the split may be different.

Read our blog to learn what makes a fair financial split.

There are lots of ways to go about splitting your money and property. Some couples can work it out between themselves in something called a kitchen table agreement. But be aware that this isn’t legally binding, and without expert help, you might not have considered the best options for your separate financial futures.

Whether you’ve already agreed how to split your money and property or need some help, amicable can provide expert support. Use our online diagnostic tool to find out which of our services is best suited to you.

3. Consider a consent order or separation agreement

If you’re married and have separated from your partner, divorcing alone won’t end your financial relationship. This means you or your ex-partner can still make financial claims against each other. For example, a claim could be made years down the line on your future property, savings, pensions, inherited money – even a lottery win.

To best prevent this happening, you can put legal documents in place to set out what you’ve agreed should happen to your money and property. If you’re married or in a civil partnership, your agreement is made legally binding in a consent order. If you’re cohabiting – you live together but you’re not married – your agreement can be formalised in a separation agreement.

There are certain circumstances where you may remain ‘tied’ together to some extent, such as if you continue to share mortgage payments or set up child maintenance payments. But a consent order or separation agreement can help you confidently set up your finances for life after divorce.

4. Keep on top of your financial admin and budgets

Whether you rent or own your property, it’s a good idea to contact your landlord or mortgage provider to explain what’s happened and make any necessary changes to the way you make payments.

Your credit report will help you track down your joint credit accounts and/or loans so you can also notify relevant banks and providers – they can ensure that both you and your ex-partner agree to any withdrawals or changes.

Consider what money is paid into and out of these joint accounts. You can then make changes to how bills are paid as agreed in your consent order.

Finally, if you don’t know already, this is a great time to assess how much money you have coming in and going out each month. Knowing how much money you need to live on is part of the financial disclosure process we mentioned earlier.

But this is also a great opportunity to question any monthly subscriptions or luxuries. With so much changing, it’s a good idea to be sensible with money during a divorce or separation, so you have enough to cover any surprise costs later down the line.

Read our blog about budgeting after divorce for more advice.

5. Strengthen your future finances

Consider getting professional financial advice as well as legal support when you negotiate your financial agreement. Your legal expert will ensure your agreement is fair and can be approved by the courts, while a financial expert will make sure your investments, including any pensions, are working as hard as they can for you, your ex-partner and any children.

Read our complete guide to pensions and divorce for more on this topic.

We’ve partnered with Octopus Money so you can access affordable money advice during your divorce or separation. Whether you just want to better understand your current financial situation or want to start saving for your children’s future, they’ll connect you with an expert who can help. Complete their online form for free money advice.