Avoiding financial difficulty after a break-up

Break-ups are hard and can take time to get over. But for many it’s the financial implications that can be the most difficult to move on from.

That’s what we’ve found through our recent survey, which showed that half a million people a year in the UK have had financial problems after splitting up with someone.

What does it mean for men and women?

We’ve learnt that financial prospects for men and women after a break-up are quite different. Women are more likely to find things hard in the short-term, as a result of being owed money or being left to pay rent or a mortgage on their own. This, in turn, may cause their credit score to suffer, which means they’ll struggle to get credit.

However, for men relationship break ups can mean longer term problems. This is because they can often have less support from friends and family around them, so are twice as likely as women to struggle to recover financially.

Here’s the stats:

More likely to be owed money? 48% women vs 29% men

Left to pay the rent or mortgage? 38% women vs 27% men

Chased by debt collectors? 27% women vs 19% men

The person responsible for applying for financial products? 19% men vs 15% women

Unable to sort any financial problems over the long term? 13% men vs 6% women

What does it mean for credit scores?

Even though most couples make financial decisions and contributions together, our survey showed that often in a relationship, men are more likely to take out credit products in their name. Over the long term, this can have a negative impact on their partner’s credit score. Why? Because your credit score is like a track record for how you manage credit. If you haven’t applied for credit before, you won’t have a credit history and won’t have much borrowing power. Lenders need to see that you can manage credit before lending to you, so it could mean you’d struggle to be accepted should you want to open a credit account in the future.

What can you do to protect your score?

Your credit score is one of the most important numbers in your life. It’s yours and it’s down to you to look after it.

  • If you’re currently in a relationship and are considering applying for credit, have a think about whose name any previous agreements are in. If possible, try and split it equally. Don’t just rely on one person in the relationship to take everything out
  • Keep an eye on your credit report and score regularly so you can keep a track of it. Want to know more about how to improve your score? Click here
  • Be aware of what financial associations you have, as if you’re connected to someone financially and they get into difficulty, it can affect your score too. For more information around this, click here

Going through a break-up at the moment? Here’s what you should do…

Dividing your joint bank accounts and possessions

You’ll need to think about how you’re going to split any joint bank accounts and savings, as well as life insurance and personal possessions. Making a list of the bills you pay jointly and separately and agree who’s going to sort each one can also be beneficial. You must try to agree as much as you can during this stage and prepared to compromise with one another to ensure you are both financially stable. The Money Advice Service offer a range of useful advance guides which you may find useful in this stage.

Debt Distribution

This can be where things get tricky. Whether you’re married or not, you’re responsible for all debts in your own name, even though you may not have benefitted from the money. If you’re struggling to sort out what to do, you may want to seek legal advice. It’s also important to prioritise and work out which debts need to be paid first in this situation, to avoid any serious repercussions.

If you have any joint debts such as overdrafts or mortgages, you will both be liable to pay off the full outstanding amount. You can find out more information on debt distribution here.

Support your children

If you have children, as well as arranging parental rights, you will also need to try to agree on how you’ll each contribute financially to their care and/or education. Try to do this in a way that’s fair to both of you, and impacts your children the least.

Get professional advice

If you’re married or in a civil partnership, it may be best to seek legal advice straightaway so you know where you stand on things. The Citizens Advice Bureau is also a good place to get some advice if you’ve separated from your partner, but weren’t married.

*Research commissioned by Noddle, carried out by Opinium Research. Surveying 2000 GB adults online between December 20th-23rd 2017.