How does rising inflation impact divorce and child maintenance
The government recently announced the Spring Budget, with a focus on halving inflation, growing the economy and decreasing public debt.
In this blog, we'll look at what the budget and rise in inflation might mean for your separation and the impact on maintenance payments and how to calculate the impact on child maintenance payments
Child maintenance payments
The latest figure for the Consumer Prices Index (CPI) was 10.4% (February 2023), up from 10.1% in January 2023, earlier this year (ONS, 2023).
Rises in inflation impact both the receiving and the paying parent when it comes to child maintenance because whilst costs of things like food, fuel, and clothing are increasing, putting the receiving parent under tremendous pressure, it's also true that salaries are not increasing at the same rate, making it difficult for the paying parent to pay more, leaving families squeezed and in conflict.
If you recognise this situation and don’t want your co-parenting relationship to suffer, amicable offers one-off coaching sessions to help you re-negotiate your maintenance payments. You can book a call to find out more.
We’ve set out below, how to calculate the increase in Child Maintenance due to inflation.
How to calculate the variation of maintenance in line with inflation:
Follow the simple steps below. You can find the current RPI figure here.
- Step one: Find the RPI figure for the month 15 months before the anniversary date (e.g. If the start date of CM is May 2023, 15 months pre May 2023 is Feb 2022. RPI Feb 22 = 320.2)
- Step two: Find the RPI figure for the month 3 months before the anniversary date (3 months before May 2023 is Feb 2023 (RPI Feb 23 = 364.5)
- Step three: Multiply the current maintenance payment by the RPI figure at step two (£200 x 364.5 = 72900)
- Step four: Divide the step three figure by the RPI figure at step one to give the new monthly payment (72900 ÷ 320.2 = £227.67)
Important : If applicable, you must check and agree on which measure of inflation applies to your child maintenance order.
If you have money, property or other assets to split...
Dividing your assets
Inflation can affect the value of assets, such as property or investments. This will need to be taken into account as you separate from your ex-partner.
If you've agreed to a split and the value of certain assets has since changed significantly, for example, pensions, you may need to consider whether a re-negotiation is required before your agreement is drafted into a consent order and goes to a judge to be reviewed.
Remember : A judge will be checking that your agreement is fair, based on your financial position as it is now, not when you first separated.
Are you delaying starting your divorce because you're not sure about your property and whether you'll be able to get a mortgage or whether you should stay named on the existing mortgage because your current rates are good?
Book a free call to understand the options around properties and mortgages when you’re separating. If you need more time we offer one-hour sessions with a Divorce Specialist.
Inflation can also impact the cost of legal fees and court expenses associated with a divorce. It's worth choosing your process and professional help carefully. You will need to balance cost with the value you gain from the help.
At amicable, we work with couples, offering services that include negotiation support and having agreements made legally binding through a consent order, as well as support making arrangements for any children.
Our fixed fees mean you know exactly how much you will pay from the start and our payment plans are interest-free so are inflation-proof.
Using alternative routes may impact your ability to reach an agreement quickly and efficiently, as well as increase the cost. Not being able to reach an agreement and having to communicate through solicitors can take a long time and rack up legal fees.
Our 15-minute consultations are free and a great way for you to speak to an expert about the options available to you as you separate from your partner.
Start your amicable divorce journey
Speak to an amicable Divorce Specialist to understand your options and next steps for untying the knot, amicably.