Divorce effect on finances is ‘catastrophic’
Divorce and separation is financially catastrophic to families and the wider economy, according to a survey.
The survey, which was carried out by Resolution, found that 28% fell into debt because of a relationship break up, and 16% admitted to asking a friend or family for financial help. It also found most people wait at least a year to 18 months before seeking debt advice and therefore place themselves in an unnecessarily worse situation.
The survey also revealed that once separated 28% turn to payday loans, an overdraft or in some cases increased credit card debts as a direct result of relationship break-up. Another 26% had to move in with a family member or friend following a relationship breakdown.
People with dependent children fare are even worse off. Some 36% of separated or divorced parent’s report that they have needed to take out a loan or gone into debt to deal with the financial strain of a break up. Parents were also more likely to rely on family and friends for financial assistance, with 21% leaning on others for help, as opposed to 14% of childless adults.
British businesses are also suffering as a result of divorce and separation, according to Resolution. It is estimated that divorce costs the British economy up to £46bn every year.
The British Chambers of Commerce recently emphasised the relationship between employees’ well-being and business productivity.
One in ten employees left their jobs after a split, or has a colleague who has left. About 16% of companies have had staff take sick leave following stress of break-up and another 15% say separation or divorce had a negative impact on productivity.
Only 10 per cent of employees think their employers offer adequate support for people going through a break up, with 34% saying more needs to be done to provide support in the workplace for those undergoing separation or divorce.