How Will I Survive Financially After Divorce?

If you have children, then child maintenance may be payable by the non-resident parent.

Child maintenance is a contribution to the costs of caring for the children, including food, clothing, and activities.

The amount of child maintenance can be agreed upon between the parties if possible. If you cannot agree on how much child maintenance should be paid, the Child Maintenance Service (CMS) can formally calculate an amount that the non-resident parent must pay.

The CMS have a handy online calculator to see how much you may be expected to pay or receive.

The CMS calculates child maintenance based on a proportion of the non-resident parent’s gross annual income (deducting pension contributions).

It can be reduced depending on how many other children they must support and whether they have overnight stays with the non-resident parent.

Child benefit

Child benefit is different to child maintenance.

The government pays child benefit and can only be paid to one person, usually the parent with whom the children live.

You are eligible for child benefit if you are responsible for raising a child under 16 or a child under 20 if the child stays in education or training.

If you are eligible, you will get £25.60 a week for your first child and £16.95 a week for any other children.

If your child’s living arrangements change following a divorce, you can update your living and payment arrangements here.

However, only the person claiming child benefit can report any change in circumstances.

Please note that there is a tax charge if you, or any new partner, earns £60,000 or more a year. You can still claim child benefit, but you will also be subject to the tax charge.

State benefit

You may be eligible for state benefits if you have recently separated and are not currently working.

The government website has a useful benefits calculator and includes detailed information on benefits, including universal credit, personal independence payment, and child and working tax credits.

In certain circumstances, agreeing on interest-only mortgage repayments or a mortgage holiday with your lender may be possible.

This can be explored early on to reduce one of your largest outgoings.

During divorce proceedings - Interim spousal maintenance

You can apply for interim spousal maintenance during divorce proceedings. These payments can continue until the final divorce order is made.

Following divorce - Periodical payments

Following a divorce, the court can order (or the parties can agree) that one party pay the other periodic maintenance payments.

These payments can continue for however long and on such terms as are specified in the final order.

However, the court prefers that parties reach financial independence as soon as possible following divorce, so this order will only be made where one party has insufficient income.

Following divorce  - Lump sum payment

An alternative is that one party pays the other a lump sum.

The recipient can then invest this lump sum to achieve a steady and regular income while rebuilding their life for successful financial independence.

These orders are not guaranteed and will depend on the circumstances of each case and what can be negotiated between the parties and/or ordered by the court.

Further orders can be made and agreed upon during a divorce. If you would like further advice, please speak to one of our specialist family law solicitors.

In addition to readjusting to independent financial living, you will also have the extra cost of legal fees for the divorce. If you cannot afford the legal fees, there are options available to help ease the financial burden:

Legal Services Payment Order

You can make a court application for a Legal Services Payment Order (LSPO) in certain circumstances. If ordered, this would mean that your spouse or civil partner would have to pay your legal fees or contribute to them.

LSPO’s are usually seen as a last resort, and it would have to be shown that you have tried to obtain funds in another way first, such as by borrowing.

Litigation Funding

One way to borrow money to pay your legal fees is through a litigation funding provider.

This is something that can be considered early in your case and even before court proceedings are issued.

At Myerson, we can consider litigation funding with a third-party provider.

These loans carry interest, and the interest on the amount borrowed can be paid by you either monthly or rolled over to the final payment, depending on the provider.

The loan is entirely repayable at the end of the case or within a certain time frame, whichever is the earliest date.

Please note that litigation funding is not available for disputes relating to children unless there are concurrent financial issues and sufficient capital assets available to repay the loan at the end of the case.

This option may not be recommended if limited financial resources are available following the divorce, as the litigation loan will be another amount you will be required to pay.