What impact could Divorce/Legal separation have on your joint Savings

"Sometimes good things fall apart so better things can fall together" — Marilyn Monroe

Relationships can fall apart for several reasons, and during covid-19, many couples broke up because of constantly being under each other’s feet and realising they no longer had a lot in common or were no longer in love. According to a guardian article, breakups of romantic and non-romantic relationships increased during the pandemic, with more than 1 in 5 dissolving their relationship at home or work.

The research conducted by University College London’s Covid-19 Social Study, the UK’s most extensive survey of social bonds, found that 22 per cent of adults went through a dissolution of a relationship of some kind, with family, friends, colleagues, or neighbours. The college analysed how relationships and lifestyles adapted during the pandemic, and more recorded data of more than 70,000 people.

However, according to ‘Office for National Statistics (ONS), there were 103,592 divorces in 2020 in England and Wales, a drop of 4.55% compared to 2019; most were among heterosexual couples (98.9%).

In addition, it is also important to note that the Ministry of Justice had revealed beforehand that the COVID-19 pandemic had impacted family court proceedings, which included a short-term postponement of operations by some courts for some time, which may have affected the time and number of finalised divorces in 2020, though it is hard to know how much this may have had an impact.

When couples are in relationship bliss, they sometimes decide to share their finances, such asjoint savings and other finances, but if a relationship reaches its untimely end, it can be challenging to know how to divide the finances and other assets after separation.

How to understand your finances?

Put together all your financial documents and statements for mortgages, bank accounts, loans and investments. You must look at your documents to ensure you have a good idea of how your finances are shaping up. Start by listing a breakdown of your salary and outgoing and putting together a revised household budget.

Division of savings

If you have joint savings and are separating, you should agree on how mutual savings will be divided. In the eyes of the law, the policies on entitlement to funds in a joint account after separation depend on where in the UK you reside.

England and Wales

After two former partners decide to cut ties, the money in a joint account goes to the person who paid into the account. However, even if one partner has not contributed, a claim can still be made to have a part of it. Although, it will be hard to prove that they are entitled to the funds in the joint account if they have not made any contributions.

The partner who did not pay into the joint account would have to show that the purpose of the account was for both partners to have joint finances, which both partners could use. Married or people who are in a civil partnership have an equal right to cash in a joint account.

If, while you were on good terms with your partner, you opened a joint current account, loan, credit card or investment with your ex. It is recommended by banks that you contact your bank, Credit Card Company or other suppliers to tell them what has unfolded. You could also ask them to freeze joint accounts to avoid your former partner mounting new debts or withdrawing without your knowledge. You must ensure that any combined bills can still be paid for using Direct Debit or standing order.

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