Debt and unaffordable living costs now a central focus in separation mediation, reports NFM

According to NFM (National Family Mediation) - the largest provider of family mediation in England and Wales - the cost-of-living crisis continues to strain household finances, meaning that many separating couples have far higher shared financial obligations—including mortgages, loans, credit cards, and short-term borrowing.

The charity, which has delivered around 16,000 mediation sessions over the last year, also says that many couples only become fully aware of their former partner’s financial liabilities, or their joint responsibility for repayment, after separation, often leading to significant challenges once they assess their monthly outgoings.

Sarah Hawkins, CEO of NFM, explains: “Historically, people have approached mediation in order to discuss children matters, and how to split the pension pots, the house, and any savings. However, we are seeing more couples come to the table owing more than they own, which can cause significant problems.

“For example, one party may expect to stay in the family home, but once they factor in debt repayments, mortgage costs, and the need to release equity to cover liabilities, this may not be financially viable.

“Equally, married couples are not necessarily aware that, in the same way that they both have some rights to what they jointly own, they also have some responsibility for what they jointly owe – whether they knew about it or not.”

Sarah notes that a common reaction to financial concerns during separation is to ‘lawyer up’ in an attempt to secure a larger share of assets while minimising responsibility for debts.

However, she warns that this approach is not only costly but also ineffective: “While each case is different, the court system in the UK would very rarely allow one party to take all the assets while leaving the other with the debt.

“Furthermore, prolonged legal disputes can exacerbate financial difficulties, with couples incurring significant legal fees and facing lengthy delays in reaching a resolution.

“It’s also essential that couples understand that as long as financial ties remain, both parties are jointly responsible for any additional debts incurred until a formal financial order is in place.

“In cases where one person moves into temporary accommodation or one-party shoulders the full cost of running the family home, for example, debts can continue to mount, further complicating financial settlements.”

With mortgage rates rising and the cost of everyday essentials increasing, separating couples are being forced to confront not just the division of assets but also how to manage shared financial responsibilities fairly and sustainably.

Recent data highlights the growing debt burden on individuals and households. As of April 2024, the average total debt per household, including mortgages, stood at £65,143. This equated to £34,487 per adult—approximately 97.0% of average earnings. Outstanding consumer credit lending reached £227.04 billion, with credit card debt alone accounting for £70.1 billion, averaging £1,308 per adult, according to The Money Charity.

“Traditionally, divorce has been seen as a matter of dividing property, pensions, and savings,” says Sarah. “However, the cost-of-living crisis means that debt is now a central concern in mediation. More couples are seeking guidance on handling mortgages, joint loans, and other financial commitments in a way that minimises long-term hardship for both parties.”

NFM also warns that prolonged legal disputes can significantly worsen financial hardship. Lengthy court proceedings not only escalate costs but also prolong uncertainty, making it harder for individuals to move forward and regain financial stability. Many couples struggle to maintain two households while awaiting a court resolution, placing further strain on their finances.

Mediation offers a more cost-effective and constructive alternative to courtroom battles. By addressing financial matters early and amicably, mediation can help couples reach fair agreements, reducing both the emotional and financial toll of separation.

To help separating couples manage costs, the government’s Family Mediation Voucher Scheme provides up to £500 towards mediation expenses, offering crucial financial relief. Legal aid is also available for those on low incomes, ensuring that professional mediation remains accessible even in challenging financial times.

“We want to encourage more open conversations about debt and provide couples with the tools to navigate their financial situation fairly and sustainably,” Sarah concludes. “The stigma around debt can prevent people from seeking help, but mediation offers a practical, affordable solution that reduces financial stress and avoids unnecessary conflict.”

For more information about mediation services and available financial support, visit National Family Mediation Service | We Help Families In Conflict | 0300 4000 636.