Costs of divorce 'not just emotional'
Oct 23, 2006
Divorcees suffer a higher debt burden than any other group, a new report has found.
The Alliance & Leicester Borrowing Monitor found that those who had been through a divorce had the highest level of debt relative to their income – with an average debt of £4,984 not including mortgages, equivalent to 28 per cent of income. Married couples, however, were much more comfortable with their debts, owing an average of £5,245 between them or £2,600 each, equating to only 15.9 per cent of annual income.
Divorcees were counting the cost of their divorce in more ways than one and were found to have fewer assets, with 44 per cent of divorcees having no savings and just 61 per cent owning their own home, compared to 82 per cent of married couples. Some home-owning divorcees may choose to remortgage their home in order to save money on mortgage repayments.
Finally, divorcees were found to rely more on credit cards and personal loans than other groups, with an average personal loan balance of £2,789. The research showed that divorce could be costly in a financial as well as an emotional way, said the managing director of Alliance & Leicester Retail Banking.
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