Usual question I guess: what is fair?

Hi
I thought I’d post here as I think the calculator is a blunt instrument and I can’t get proper sense from it, it puts the result 60/40 in the wife’s favour no matter what numbers I plug into it.

One of the reasons for seeking divorce is we can’t see eye to eye on finances. In particular implications regarding ownership of the marital home.

Briefly, when we met 20 years ago the house was already hers, probably worth about £75,000. She was up to her neck in debt, about £18k and during the first period of us being together had to put the house on the market, going to lose it.

I moved in in 2001. I gave her £6k lump sum immediately to help clear the debt, in lieu of rent, which I didn’t pay for 12-14 months I guess, so a good deal on both sides. As the debt was crippling her, she was only temping and my income was sporadic. I did however have about £25k in savings (now less the 6) and a pension which I’m guessing was at about £10_15k.

We lived together for 9 years, mostly splitting everything down the middle regarding bills, the mortgage etc and I believe we set up the joint account, which then also had the mortgage on it before we got married (I.e we got married 9 years after moving in).
Around this time I spent £15,000 on a conservatory, doing all the groundwork myself - shovelling out 110 tonnes of heavy clay and rubble, moving and rebuilding two stone partitioning walls etc. Her contribution was the floor which was about £350 and some white paint.
A year later I found myself out of work after knowing it was coming for maybe 6 weeks (credit crunch), couldn’t get back into full time work so attempted to become self employed, which ultimately didn’t work. She was working at the time and I was still paying half as agreed from my sporadic income and out of savings: I’m a keen saver and investor and had grown the £20,000 left in the isa to close to £90k before the conservatory build. The pension was growing likewise.
Her contribution: nil.

It was quite clear for over 12 months that her job was going the same way, however she did nothing about it and sat it out until redundancy, leaving us both out of work. By this time I was applying for jobs here there and everywhere but being unsuccessful, still earning sporadically, living off savings but Now having to pay almost all of the bills, the mortgage, her car loan. The only thing I insisted she pay for was the food bills, which she did. Through the whole sorry episode I lost around £30000 in savings keeping us afloat.

She made little effort to find work for 2 years, nothing was ever good enough, she wasn’t prepared to travel , not even 10 miles, and I think she was using it as a tool to make me ‘magic’ a job up out of thin air for myself. I wrote hundreds of applications etc.....anyway long story, lots of vicious arguments.

Eventually she did find work before I did so the tables were turned slightly and she started paying her own car loan again and the bulk of the bills for around 18 months. I then got a zero hours contract for 12 months working here ther and everywhere for about £90 a week and the. Finally got a job back in full time employment travelling 4 hours plus a day to make £25k gross which was still more than she was earning...and then things got split down the middle again.

I’ve saved and invested heavily you since then, currently sacrifice 54% of my wage of £38k into the pension which is now standing at £160k. ISA is £50k. I also received an inheritance which is 1/3 of a property shared, my share around £40k. Rent £2300 a year.

Into the house I’ve invested £12k Ona new kitchen (her contribution was a window and the carpet!). A garage conversion, cost me £5k plus 4 months of my labour doing all the brickwork, carpentry , electrics, plastering, decorating etc.

Her contribution to those savings and pension 0. My contribution into the house: 50% of the mortgage for mostly the same period as her on aggregate.

I think she has a small pension pot of around £25k, savings of maybe £15k but no real idea: she’s got my details but refuses to tell me hers. The house I estimate is worth £180k.

She currently has a job, but, it’s off the books, I.e. she isn’t declaring it and refuses to. She found she had a shortfall in NI due to contracting out, so I’m paying the shortfall. I can’t claim married couples allowance because she won’t let me do it, whereas if she declared her earnings, which are around the tax threshold I could.

Which brings us to one of the reasons for being THIS close to a split. She is adamant the matrimonial home is her asset, everything is still in her Maiden Name. Because of this I don’t see why I should keep sinking my money into her asset, she wanted £2500 for fencing recently and I refused.

To my mind this is wrong, she’s older than me, 18 months off retirement. She expects me to support her as she’s not made adequate provision. And by the looks of things expecting me to support for the next 18 months as her job is looking shakily and she won’t look for anything else. She then expects me to subsidise her retirement, look after her in old age and then finally, leave me homeless if she decides to equity release or sell the place out from under me to pay for care etc.

The plan was that I was going to retire 6 to 8 years early, I can’t see that happening now. In the meantime I work my backside off in a very stressful, demanding job to take home minimum wage. To top it all off, because things are shaky it looks like my father who is moderately wealthy is going to write me out of the will, or leave my share in trust with my sisters because he doesn’t want my wife to have. I.e. I’ll never see it. Plus he blackmails me along the lines of I should know what x y and z is worth otherwise I’ll stop saving so much myself.


Anyway, lng story short.
The calculator says it will get split 60/40 in my wife’s favour. Why? Forgetting all the whys and wherefore, how on earth is that right?
Plus I’ll have to reduce my expenses by £500 a month?.. leaving £300 a month to live on?.. Plus pay my wife £500 a month maintenance?

WT actual F?


So basically I’m completely and utterly done whichever way the cake is cut. May as well jump of a bridge because I’ve been completely done over.

So sorry to read your background/story. I'm not an expert but can only give my advice. Take the online calculator with a pinch of salt, I tried it and it gave me something completely different to what I actually got, and that was after a final hearing.

Do you have any children together?

You could well end up with 50/50, the courts will expect her to work, you have a very good chance of getting a Clean Break. Courts very much like that.

So in her opinion the house is hers but everything in your name is a joint asset to be split?

No chance of that after 20 years together.

Post details of ages, incomes and all assets and someone will advise but the priority will be housing you both with your strict needs being a one bedroomed home.

Thanks.

No children
Me
Age 47
Gross employment income
£38.5k
Income from what is now a hobby ( and one cause of great argument): now only £1000 per year undeclared
Income from property rental £2350 (gross before tax)

Income from employment £16,500 before tax and NI. I salary sacrifice 54% into pension. A further £4000 or so goes in out of my net wages leaving me around £1200 per year ‘spending money’.

Assets:
ISA: £50k
Pension: approx 160k: increasing by 2k a month with my input.
1/3 share in property £40k

CAr, now maybe £5k
Intellectual property rights in recordings: bugger all these days.

Contents of recording studio: depreciated value not a lot. Couple of grand.


Hers:
Age 64, due to retire. They won’t make her work.

Income: no real idea, for the purposes of this say zero as no way of proving it, reality is she has more money to Chuck around than me.

Pension, a complete guess: £30k
Savings, complete guess: £15k
Car:£2500
Other income undeclared from hobby: EBay, maybe £1000 per year.

Outgoings>
Me into joint account £580 per month.
Her supposedly the same but she doesn’t put her money in the joint, only tops it up when necessary. She also last year took the mortgage off it as its ‘easier’ I.e. there’s only a year or so left on it and she doesn’t want me to see when it’s paid so I’ll keempaying the same.

Other outgoings.
Me: her NI £800 per year
Me car expenses for getting to work £130 per month including insurance etc say.
Phone and internet: £25 per month

Her
££50 petrol per month for works, she works mainly from home
Car tax etc £60 per month

Debt
Me, none
Her I reckon £1000 on a credit card

I’ve looked at costs of 1 bed properties and on a 10 year mortgage which is realistic I couldn’t afford to live, especially if paying maintenance. I’d continue to salary sacrifice the same as now, probably at a lesser rate, get an interest only mortgage and pay the capital at the end. Even doing that it’s basically undoable.
Meanwhile she sits in the house with the bulk of my savings as well according t the calculator, and I have to pay maintenance.

Still not enough information to make a call but primarily your assets between you are the house and the pension.

You still work, she has a limited capacity to earn and is close to pension age presumably for both her private and state pension.

Ultimately after such a long relationship the crux of the matter is that you are both housed suitably i.e. in a one bed place and that you both have an income and/or pension.

So you need to know the value of the house and start at 50% of that each and whether it will house you both and/or provide savings/income over and above that.

if it isn't sufficient then it will be down to you have the greater mortgage capacity by virtue of working and if need be your pension sacrifice may have to be lowered to allow you to afford a mortgage. Plus like it or not you effectively have a 21 year working life left if need be to keep the mortgage cost affordable.

In terms of incomes/pensions it's about making sure you both have enough now and in retirement. She is close to state pension and has some provision but you may need to sacrifice some of your pension as you can continue to build yours for 20 years and she can't. You may be able to offset some of the equity in the house in exchange for keeping more of your pension and she takes that equity to generate an income.

You're too focused on the irrelevant details about who dug the footings for a conservatory than the here and now of assets/income/pensions that ultimately will house/sustain you now/sustain your retirement.

Both of you will have to cut your cloth accordingly but given the value of assets a solicitor is probably a good bet for an initial consultation but just go there with the solid facts on the assets/incomes/pensions along with expectations of housing costs/lifestyle costs and retirement plans, don't waste your hour talking about who painted a wall

Ok.
The numbers are near enough. I don’t know what further details would be required,


Anyway. Thanks . It looks like it is 60/40 maybe even more in her favour then.


So the lesson to learn from this is put zero financial effort into a relationship above the minimum to get by. Spend all your spare money and rely on your partner to build up all the liquid assets. That way, if the time comes the none contributing party gets the bulk due to their ‘inability’ to earn. That’s absolutely right, someone that spends 3 hours a day lying in bed does have a hard time earning.

You've never mentioned how much equity is in the house so that's pretty much a critical figure to house yourselves as per my earlier comments on mortgage capacity

To break down what we know

House equity
Family home - £?
Part share - £40k

Pensions
You £160k
Her £30k

Savings (-debt)
You £50k
Her £14k

Income
Yours C. £40k
Hers £?

SO we have
£104k in "cash equity" (though £40k may be hard to extract due to the joint ownership with others)
£190k in pensions one which is almost liquid
an unknown amount in equity in an almost mortgage free house

So given you need housing, an income now and an income in retirement it's impossible to give advice with the gaps