In this article Anesha highlights the difficulties that divorced and divorcing couples face, following the Bank of England’s interest rate rise and inflation warnings.

With interest rates rising and recession predicted, the Office for National Statistics has announced that the Retail Prices Index (RPI) has increased 11.8% in the year to June 2022, the biggest increase since January 1982. The National Institute of Economic and Social Research think tank predicts the RPI could reach 17.7% by the end of the year. This is hugely difficult for all consumers, but has particular significance for divorced and divorcing couples.

The regular monthly payments often paid by one former spouse to the other, known as spousal maintenance, are often expressed to include an automatic review of the amount being paid each year to ensure spousal maintenance increases is in line with inflation.

The most common way this is done is to include a provision in the court order to link the inflationary review to the performance of the RPI. This means that if you are the receiving former spouse you will get some help to meet the rise in cost of living. On the other hand, if you are the paying spouse you will have to pay more, even if your own expenses have increased and your income has not.

An increase to maintenance based on the RPI is worked out by comparing the most recent RPI with that of a year previously therefore a sharp rise can lead to unprecedented changes in the carefully balanced arrangement of a former couple’s incomes.

Sometimes the paying spouse cannot afford an increase in spousal maintenance payments. In this scenario they could apply to court to vary the spousal maintenance order downwards based on the change of circumstances. Alternatively, if a paying spouse does not pay the increased rate despite a request based on the RPI, it may be necessary to apply to court to enforce the higher sum.

At TV Edwards we can advise on the calculation, variation and enforcement of maintenance payments. We are proud to be valued advisers for our clients when times are tough. Please get in touch so we can help you.

Article by Anesha Pavaday

Anesha is a qualified lawyer, assisting and advising on:

• Divorce and dissolution of civil partnership
• Financial remedies on divorce and dissolution
• Unmarried couple finances including property disputes
• Private law children disputes and domestic abuse