Divorce: Entitlements and costs

Tammy Wynette sang about it, Henry VIII created a religion because of it and lawyers make a fortune from it. Divorce can affect everyone from royals to rock stars. And it doesn't come cheap.

When three-times married golfer Nick Faldo won a tournament in South Africa, he asked his wife whether she would like a designer dress or diamonds. 'Neither,' she replied, 'I want a divorce'. 'Ah,' said Faldo, 'I wasn't planning on spending that much'.

If you spent the UK average of £15,000 on your wedding, expect to pay nearly as much for the divorce. Few of us realise that untying the knot can cost almost as much. A survey by Norwich Union found that the average divorce in Britain costs £13,000. With 157,000 marriages ending in divorce every year in Britain the total amount spent by divorcees comes to an annual bill of more than £2 billion.

The ex files

The survey found that property is the biggest item on the bill with more than a third forced to sell their home to cover the cost of their divorce. Unless there is a prior agreement then homes are usually split 50:50 but the welfare of children will be a factor. The cost of renting or buying another home alone could set you back £6,000 in the first year, with set up costs of more than £2,500.

Becoming an ex also means raiding personal savings to supplement funds. Some 41% use, on average, £6,250 from a savings account. That equates to a national withdrawal of around £800 million each year. For those with fewer resources, a personal loan provides a breathing space. Customers of Sainsbury's Bank took out £7.23m in loans to pay for divorce settlements during 2004.

Of course the cost is not merely financial. Unsurprisingly, divorce tops the grief list with almost half of those surveyed ranking it as the most stressful experience, above bereavement and redundancy. And because of this, 40% of divorcees said they would never marry again. Even though 60% of those questioned said they ended their marriages amicably, a typical divorce settlement takes more than a year to negotiate so it's easy to see how the lawyers make their money. Norwich Union places the average cost of legal fees per person at £1,694. If a parting is on amicable - or at least civil - terms, then quite a bit of progress can usually be made before the legal system is invoked. Do whatever you can to settle the hostilities and money issues as quickly as possible provided you are getting your fair share. Arbitration rather than litigation will save you a lot of money.

Behind every great man...

Research from accountancy firm Grant Thornton shows that in 2004, an massive 93% of divorces were petitioned (instigated) by women. The fairer sex also achieved a better or considerably better settlement than men 60% of the time.

At present, non-working wives cannot set up their own pension funds as they have no independent income and this leaves them dangerously exposed in later years. But the law changed in 2000 and now allows the courts to order the partner with the better pension provision, usually the male, to share that pension with their divorced spouse. The fund is split by the court and the judge will look at the pension in the context of all assets. It will rarely be split straight down the middle. But it could mean that it will be a lot harder for one party to obtain ownership of the house, as before this has often been given up by the other spouse to compensate for the loss of pension.

A high profile divorce case in 2004 set new territory for divorcing couples and made wealthy people everywhere very nervous. The Court of Appeal ruled that Karen Parlour, ex-wife of Arsenal star Ray Parlour, is entitled to receive one third of his future earnings to acknowledge the role she played in his success. For the Parlours, this means that the personal maintenance award of £250,000 a year, made in the High Court in January, will be upped to £406,500 pa, to run for four years, when it will be reviewed. It is likely that future payments, after the four-year period, will be reduced in line with a predicted fall in Ray Parlour's earnings.

Bride and gloom

In the vast majority of divorces, a wife's entitlement to annual maintenance payments will continue to be assessed on her need. The judge in this case made it plain that the ruling had been made because, in the case of the Parlours there was a huge excess of income left over after taking into account Mrs Parlour's maintenance needs. It will apply only to cases where an earner's income is so high that, even after both party's reasonable needs and those of the children are taken into account, there is a still a substantial surplus.