Financial problems are the number one cause of divorce in the UK. Could the pressures of family life be contributing to that? And would increased financial education help solve the problem?
I remember one morning about 14 or 15 years ago. It was raining and my wife was giving the children a lift to school. “Daddy,” my daughter said as she put her coat on, “Mrs Reed says we’re going on a field trip and we can take £5 spending money.”
“Oh,” my eldest son said, “I need to pay for my school football shirt.”
“And I got my 25m swimming badge, Daddy.”
“You don’t have any change for the car park do you?” my wife said, giving the knife one final twist.
It cost me £25.60 to walk out of my front door that morning – and I still refer to it as ‘Front Door Tax,’ conclusive proof that families can be bad for your wealth.
And that is before you go on holiday…
We would finally breathe a sigh of relief as the end of the school year arrived. No more field trips and no more swimming badges to pay for. Instead, just the ludicrously expensive family holiday, with the price of the holiday having mysteriously sky-rocketed just as the children broke up from school.
This has been a perennial bugbear with parents: as soon as the school term ends up go the price of family holidays – and by a considerable margin.
Many parents take their children out of school during term time so that they can arrange cheaper family holidays. Obviously, schools are not in favour, arguing that it disrupts classes and disrupts your child’s education. A few years ago fines were introduced for unauthorised term time absences and a BBC investigation has found that over the past three years parents in England and Wales have paid £24m in fines, with some parents now freely admitting that they include the cost of the fine when they are budgeting for the holiday.
Financial pressures take their toll on marriages
We have all heard of ‘Blue Monday,’ the day when the Christmas credit card bills arrive: when the euphoria of the festive season has worn off, when it is still cold and dark and when the presents suddenly need paying for. But before ‘Blue Monday’ comes ‘Divorce Day:’ the first working Monday of the New Year when one partner has had enough and solicitors are fielding a lot of new enquiries.
Financial pressures are the most common reason for divorce – with over a third of respondents citing this as the main reason – and as the examples above show, they do not have to be major financial pressures: just the endless pressure of the money running out before the end of the month and not being able to afford a holiday.
But whatever the reasons, the number of couples getting divorced – having started to decline – has started to go back up of late.
The most recent figures from the Office for National Statistics (ONS) show that 107,000 couples divorced in 2016, an increase of 5.8% on the previous year and the highest increase since 2009 – coincidentally, just after the financial crash of 2008.
When are you most likely to get divorced?
The most common age for divorce in the UK is between 45 and 49 for men, and between 30 and 39 for women – reflecting the fact the women tend to marry men older than themselves.
Worryingly, though, the age range which is showing the biggest increase – for both men and women – is the over-50s. More than 13,000 women aged 55 and over divorced in 2016, with more than 19,000 men suddenly finally themselves single. I mentioned this to my wife across the breakfast table, wondering why so many people got divorced just after retirement. “Easy,” she said, giving me a particularly piercing stare. “Twice the man and half the money.”
Is education the answer?
A story on the BBC last week highlighted the fact that adults’ financial skills around the world – not just in the UK – are ‘strikingly weak.’ A quarter of adults struggled to work out how much change they should get in a shop and to read a simple financial graph. Is there a need for more education? During my time as an IFA (before I ran away to join the circus and started writing), it struck me that money was like football or singing.
If you think back to your class at school there was someone who was just naturally good at sport: someone else just opened their mouth and it sounded sensational. Money, in my view, is the same. Some people are naturally good at it: some not so. But clearly we can do more to help those people who struggle with money: it seems ludicrous to me that my children went through school learning about ox bow lakes and Henry VIII’s wives and not being taught about loans, savings and mortgages. Mis-selling scandals? Education would not be a bad place to start…
The financial and emotional cost of divorce
So much for my Monday morning rant. But it is a serious point: divorce can have a very high financial and emotional cost and if education can go some way to solving the problem so much the better.
A divorce – if it goes all the way to a contested final hearing – can cost more than £30,000 in legal fees, with money matters taking an average of 14½ months to sort out after the divorce. “There is no easy way to put this,” said Sarah Coles of Hargreaves Lansdown,
“Divorce is likely to be a rough road which will take its toll both emotionally and financially.”
There are no figures, but you suspect the NHS might also pay a heavy price for the increasing number of divorces: stress and depression must go hand in hand with the financial cost of breaking up.
Let me end by travelling back in time again. I spent the whole day at work wondering how it had cost me twenty-five quid to leave my own house. But there was worse to come…
“Olly’s Dad has got a new car,” my son said when he came in that night. “And it’s way better than yours.”
At which point something snapped. “What? What?” I screamed. “Olly is an only child. He does not play for a football team that changes its kit every four weeks. He does not empty the fridge to ‘keep him going’ until the kitchen slaves cook him a meal. If I only had one child I’d drive a Ferrari. Your mother would drive a Ferrari. Even your damn Granny would drive a Ferrari.”
A slight exaggeration, but you get my point. Enjoy your week…