posted 9th January 2024
Rebuilding Your Finances After Divorce
The settlement ends one arrangement and starts another. Most people find the first few months harder than expected, not because the settlement was wrong but because running a household alone is a different exercise.
Start with what you actually have
Once the order is made, work out the real position:
- What came to you from the settlement, and when each part arrives
- What you owe, and in whose name
- What comes in each month, including any maintenance
- What goes out, on the new arrangements rather than the old ones
Maintenance, where it is payable, may be for a fixed period. Worth knowing when it ends rather than discovering it.
Untangle what is still joint
This is the part people leave too long.
- Close joint accounts, or move them into one name
- Remove your name from joint debts where the lender will allow it
- Check for direct debits still running from accounts you no longer use
- Update beneficiary nominations on pensions and life policies
- Update your will, since divorce affects it but may not do what you assume
Joint borrowing links your credit record to your former spouse for as long as it exists, whatever the order says about who pays it. A missed payment by them can still affect you.
Check your credit record
Obtain your file from the credit reference agencies and look for accounts that should have been closed, balances that look wrong, or any financial association with your former spouse that can now be removed.
Errors are common after a separation. They are straightforward to dispute once you know they are there.
Expect the first year to be the hardest
Running one household on one income after two people ran one household on two is a real change, not a temporary inconvenience. Budget on what you now have rather than on what you were used to.
If the settlement leaves something arriving later — a lump sum on the sale of a house, for instance — plan around when it actually arrives rather than when it was agreed.
Where professional help is worth it
Where debts are unmanageable, a free debt advice service is the place to go rather than a commercial one. National Debtline and Citizens Advice both provide it without charge.
For longer-term planning, particularly around pensions, an independent financial adviser may be worth the cost.
One thing to check before you get here
Everything above assumes the settlement was properly finalised. If you divorced without a financial consent order, the financial position between you remains open, and either party can still bring a claim.
That is worth resolving before building anything on top of it. Get in touch if you are unsure whether you have one.
This guide is for information purposes only and not to be construed as legal or financial advice.
