The festive season is over, and while many are looking forward to a fresh start, January unfortunately brings a surge in divorce enquiries known as “Divorce Day.”
In this article, we explain what Divorce Day is, why it happens to fall on January 6th, and why it has become increasingly relevant for self-employed individuals.
Why January?
The reasons behind this spike are multifaceted. Sarah Coles, head of personal finance at Hargreaves Lansdown, explains: “As the festive season gives way to the post-Christmas comedown, divorce season moves up a gear. The first working Monday of the year traditionally sees a surge of divorce enquiries, from people pushed to the brink after spending the festive season together.”
Essentially, the enforced proximity and heightened expectations of the holiday season can exacerbate existing tensions in a relationship, leading couples to seek legal advice once the festivities are over.
The statistics
Divorce rates have been on the rise, painting a stark picture of modern relationships:
- 41% of couples married in 1997 were divorced before their 25th anniversary, compared to 23% of those married in 1963
- 18% of couples who married in 2012 were divorced by their 10th wedding anniversary
- On average, couples divorce 12.9 years after marriage
These figures highlight the increasing complexity of relationships and the importance of being financially prepared, especially for freelancers who often have less stable income streams than those in traditional employment. Businesses that pay corporation tax and employer national insurance will face higher taxes in 2025, in addition to other rising costs.
What can freelancers do if they are headed for a divorce?
Whether you’re hoping to salvage your relationship or facing the prospect of divorce, here are some crucial steps:
1. Identify and address the issues:
Common factors leading to divorce include financial strain, lack of communication, and infidelity. If you’re committed to making things work, seek professional help to address these issues head-on. Couples therapy or financial counselling can provide valuable support and guidance.
2. Protect your finances:
Coles emphasises the importance of taking immediate action to protect your finances.
Emergency budget: “Your first priority is damage limitation,” says Coles. Create a detailed budget that accounts for your reduced income and potential legal fees. “People often run up debts after a split, because they’re dividing the same income between two households – while at the same time paying for what can be an expensive process. It makes sense to draw up an emergency budget to cut your expenses as much as possible during these first difficult months.”
Joint finances: Review joint accounts, mortgages, and credit cards. “If you’re being paid directly into a joint account, arrange for the money to be paid elsewhere,” advises Coles. If there are joint debts like a mortgage, discuss with your ex how payments will be maintained. “If your ex refuses to pay their share, or you’re struggling to pay yours, talk to the mortgage company and see if they will allow you to pay interest-only for a period, or take a break while you sort something out.” Contact your bank to discuss options for managing joint accounts, such as requiring both parties to agree to withdrawals. You can for example place controls on debts to prevent either of you from abusing joint arrangements.
Credit cards: “Check your credit cards,” warns Coles. “There’s no such thing as a joint credit card.” Understand who is the primary cardholder and who is responsible for the debt. If necessary, block cards to prevent further spending.
Asset valuation: Understand the value of all your assets, including pensions and business interests. Consider seeking advice from a financial advisor to ensure a fair division of assets. “It may be worth speaking to a financial adviser as well as a lawyer,” suggests Coles. “This comes at a cost, but if they set you on the right course, it can repay itself several times over in the long run.”
3. Legal and financial advice:
Consult a solicitor: Understand your legal rights and obligations regarding property, finances, and child custody (if applicable).
Money talks with kids: Parents, despite any disagreements, should always prioritise their children’s well-being. This means ensuring children are cared for, not neglected, and shielded from conversations about financial concerns.
Discussions about money with children should be educational, focusing on concepts like budgeting and responsible spending. Avoid using these conversations to blame your spouse for financial difficulties.
Explain that affordability is a part of life, and if finances are tight due to a divorce or separation, frame it as a time of adjustment for the whole family. Emphasise that everyone is working together to adapt to a new financial reality, rather than making children feel punished.
Seek financial advice: A financial advisor can help you navigate the complexities of dividing assets, particularly if your business is involved. You want to find options where your business does not suffer or go into insolvency because of marital problems. This will not only be in the best interests of your livelihood but also for future alimony and childcare payments.
If divorce is imminent:
Documentation: Gather all relevant financial documents, including tax returns, bank statements, and business records
Transparency: Be open and honest with your solicitor and financial advisor about your financial situation
Negotiation: Aim for a fair settlement that protects your financial future and allows you to continue operating your business
According to Citizens Advice, if you live in England and you want to end your marriage, you can apply for a divorce. If you want to end your civil partnership, you can apply for a dissolution. The process is the same for both. See advice for See advice for Northern Ireland, See advice for Scotland, See advice for Wales
You don’t need to give a reason to get a divorce or dissolution – this is sometimes called ‘no fault’.
You can only get a divorce or dissolution after you’ve been married or in your civil partnership for at least 1 year. If it’s been under 1 year you can find out how to separate from your partner.
You and your partner only need to make 1 application between you. You can send the application from:
- both of you together – called a joint application
- just you or your partner – called a sole application
Before you apply, you will need to discuss and calculate with your partner the following and find agreement where possible:
- how to divide any money you share
- what happens to your home
- where any children you share with your partner will live
If you haven’t agreed on what to do with money, your home or children, you can still apply for a divorce or dissolution, according to Citizens Advice.
When you do apply, there is a fee. You’ll need to pay a court fee of £593 when you apply for a divorce or dissolution. You might also have other costs if you’re going to use a solicitor.
You can share the court fee with your partner.
If you’re sharing the fee with your partner but you’re going to make the application, Citizen Advice suggests you get payment from your partner before you pay the fee.
- If you’re not sure you want a divorce or dissolution, you can find relationship counselling services on the NHS website.
- If you’re the respondent in a divorce or dissolution application and you want to dispute it, you should speak to a solicitor first. You can find out how to respond to a divorce or dissolution application on GOV.UK.
Divorce is emotionally and financially painful, so that is why careful planning and proactive steps are necessary for all parties involved. Freelancers and those running a small business must navigate this challenging time and safeguard the family’s overall financial well-being the same as their partner, while also preserving their business’s future success. Seeking professional advice is highly suggested to ensure you are protected and informed throughout the process. But there are plenty of free financial tips on hand too (see the video below) to feel more confident about finances while going through a divorce.
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