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www.dailymail.co.uk - 2nd January 2012

Strings ATTACHED: Divorcing middle-classes failing to get a 'clean' break due to financial squeeze

By Dan Hyde

Desperate for a fresh start, the last thing a divorcing couple needs is a lengthy string attached to the tail-end of a split settlement.

But the financial squeeze has left far more middle-class divorcees unable to cut ties with former partners, family lawyers say.

Those without access to a wad of cash - a rising number thanks to job losses, the UK's credit squeeze, and stagnant earnings - are failing to get a clean break.

Instead, they're being forced to barter monthly maintenance bills, which often drag on for years after a split.

Ed Kitchen, of law firm Pannone, says instalment payoffs are now 50 per cent more popular than when recession first struck in 2008.

The fallout from a jagged break can be painful, with new singletons financially shackled and unable to make a fresh start.

The UK divorce rate is creeping up for the first time since 2003 having hit 4.9 per cent in 2010, the latest Office for National Statistics figures show.

In December, a spokesman for the ONS blamed unemployment and a downturn in the housing market for a spike in family instability.

Marriage counseling experts added the soaring cost of living, which reached 4.8 per cent on the consumer prices index (CPI) in November, to the mix of factors straining relationships.

The big picture is that the current economic environment is acting as a 'pressure cooker' for couples.

Higher earners hit by tax avoidance crackdown

Even Britain's highest-earners are struggling to pay their divorce settlements, Pannone says.

It says clients including leading businessmen and professional sportsmen are among those offering former spouses 'limited settlements'.

This is due to unexpected large tax bills landing on their doorsteps following a clampdown on avoidance schemes.

Part of this will see the Government try to raise an extra 1billion a year over the next four years by routing out 'disguised remuneration', where tax is bypassed using employment benefit trusts and pension schemes.

But a rush of fed-up husbands and wives looking for a way out has failed to prompt banks into loosening the purse strings.

Since the banking crisis struck with a bang in 2008, banks have been reluctant to lend - even to the most reliable of borrowers.

Mr Kitchen says professional couples have been severely affected because they can't get hands on the chunk of cash needed to fund a break-up.

Alongside a lump sum payoff to settle shared finances, there are legal fees. These can range into the tens of thousands for a disputed divorce case.

Mr Kitchen explains: 'The last recession followed a period of sustained economic prosperity when spouses having to pay for divorce settlements were more able to get their hands on sufficient money to make a single clean break payment, either from savings, by borrowing or relying on bonuses.

'However, what has become clear to us and other divorce lawyers across England and Wales is that many more people simply cannot afford to do that now.

'There are, of course, still those individuals wealthy enough to give a single lump sum to their ex-husband or wife but it seems that most are not so fortunate.'

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