Can’t buy me love: How money affects relationships and separations

Many of us don’t like talking to our partners about financial issues. Indeed, different approaches to money can be one of the most common reasons for relationship breakdown. LGFL Financial Director Anne Leiper explains how different approaches to money can adversely affect the outcome if you separate and/or divorce.

As a nation, we Brits tend not to want to talk about our finances. According to a 2021 survey, 35% of us consider money a more awkward topic of conversation than our health.

A 2022 survey by Klarna also reveals that people don’t talk to their friends or family about money:

- 32% of UK adults feel too uncomfortable to talk money with peers, despite

- 44% worrying regularly about money

- 21% have never discussed personal finances with friends or family


Attitudes to personal finances

Within a relationship, different attitudes and approaches to money can cause significant issues. For example:

  • One partner might consider themselves to be frugal, whilst the other is seen as a spendthrift.
  • The other partner may consider themselves are a person who works hard and enjoys their money, and the other partner is miserly.

In addition, one partner may feel they are the one who earns all the money, whilst the other is not contributing. As family lawyers, this is something we see a lot.

The emotional issues arise when these different viewpoints clash over important financial decisions, especially if there are children involved.


Family finances

At a time when household budgets are being tightly squeezed, many families will be much more conscious of what they are spending. What may have been seen as part of an affordable lifestyle - high value cars, exotic holidays, impressive kids’ birthday parties - may now become a symbol of being financial irresponsibility or may just not be achievable.

Coupled with the cumulative effect of the media bombarding us with messages of impending financial problems, any deeply-entrenched views about money can become a flashpoint for couples. This is likely to cause further issues.


Secret accounts

As family lawyers, the issue we often come across is when this difference of opinion leads to the concealment of assets and mindset of secrecy around personal finances. One partner hides away monies and assets in accounts and portfolios that their partner are unaware of.

This may be done for a variety of reasons:

  • To keep money from a financially irresponsible partner
  • To allow a degree of autonomy in how they invest their money
  • As a “running away” fund, just in case

Sometimes it’s just that one partner sees assets as “theirs” and feel they don’t have to disclose them.

Financial secrecy can be highly corrosive in a relationship where emotions already run high. It erodes trust between partners and can create feelings of both financial and emotional uncertainty at best, and deep mistrust at worst. These strong emotions can permanently tarnish a relationship even if the secrecy is not done through malice.


Hidden debts

It’s not just assets that may be hidden. One partner may choose to conceal debts that they have run up, out of a sense of embarrassment or through desperation. Discovering a partner’s hidden debt is bound to cause friction and arguments, whilst the solution requires partners to work together.

The Citizens Advice website offers help if you are faced with debt problems.


Full and frank disclosure

These differences about finances inevitably come to a head when couples decide to separate and need to agree on a financial settlement. If the couple cannot come to an agreement through mediation, the case usually goes to court.

In court, there is a legal obligation for both sides to make “full and frank disclosure” of all their assets. This includes:

  • Income
  • Any property owned
  • Capital assets
  • Pensions

If assets are concealed from the court, and later discovered, there can be severe consequences. See our blog for more details.


Proportionality of costs

Many divorcing couple assume that when they separate, their assets will be split 50/50 between them. This is not automatically the case in the UK family courts. The court will decide this by balancing a number of criteria, with the needs of any minor children always taking priority.

It’s important to realise that a family court is not a “moral” court, and its aim is financial fairness. Under no-fault divorce, you can no longer allocate blame. The court will not take into account any arguments based on who did what, only who needs what when deciding the finances.


Talk to your partner about money

If you’re struggling to even start talking to your partner about money, the charity Relate have some excellent starting points on their website.

You can also find more help and advice on the pdf created by the Money & Pension Service.


Talk to use about financial settlements

At LGFL, we often advise a pragmatic approach to financial agreements. We will always fight your corner, of course, but we aim for settlements that are both just and realistic.

This approach ensures that together we can achieve financial settlement agreements between you and your partner that are workable, reasonable and affordable.

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