Economic Abuse: regaining financial independence
Common signs of economic abuse. If a current or former partner has interfered with your money or other economic resources in some way to limit your choices this may be economic abuse.
Domestic abuse takes many forms and does not always involve the use of physical violence. Some abusers repeatedly dictate their partner’s choices and control their everyday actions, becoming violent or threatening to become violent if their demands are refused. This pattern of behaviour is a form of abuse known as coercive control. It is designed to intimidate, isolate and control the victim.
An abuser may restrict how you acquire, use and maintain money and economic resources, including accommodation, food and clothing (creating dependency). Or they may exploit and/or sabotage your economic resources (creating instability) This is known as economic abuse, and it is commonly experienced within the context of coercive control.
Some of the signs of abuse are highlighted below:
- Restricting access to money
Preventing the victim from working, or restricting their hours. The abuser might insist that all salaries are to be paid into their personal account and prevent the victim from having their own bank accounts.
- Restricting spending
An abuser may seek to dictate what can and can’t be spent, and when. A victim may be forced to keep a running log of their spending, including a money diary, or provide receipts or justification for every single purchase. An abuser might take control of assets and insist that these are put solely in their name.
- Sabotaging economic resources
In some cases abusers will try to deliberately sabotage the victim’s resources. They might steal money or property or may even cause damage to devalue the house, for example. Abusers might spend the money set aside to cover those costs. They may force all credit cards and bills to be in the victim’s name, and damage their credit rating.
- Exploiting economic resources
In some situations, abusers attempt to exploit the economic resources. This may include refusing to contribute to household costs like utility bills or the running of the car, taking control of the victim’s income or running up debt in their name.
- Displaying threatening behaviour for non-compliance
Economic abuse rarely happens in isolation; it normally happens alongside other kinds of abuse. You might find an abuser threatens physical violence if you don’t comply with their demands around money, be it giving them full access to accounts or being forced to have accounts or assets put in the victim’s name.
- Economic abuse happens without realisation
Economic abuse can be difficult to identify. It can develop slowly and could begin with behaviour that at first seems protective or caring, for example, offering to take care of all the finances or encouraging you not to work so that you can look after the children. Overspending, and building up debts can also develop slowly and may not be obvious at first. Some women may have lived with economic abuse for many years, and it can continue after leaving.
If you are experiencing economic abuse, you are not alone. Although it can be hard to identify, 1 in 5 UK adults have experienced economic abuse at some point. And more than ever before, there are people and organisations who understand and who can help. Visit www.survivingeconomicabuse.org/resources for information on steps you can take towards economic safety, organisations that can help you, and grants, benefits and financial help.
Separation & Divorce
Spouses who are at the brink of divorce have often experienced some form of economic abuse during all or part of their marriage. It is not unusual to act for spouses who have been subjected to extremely controlling behaviour by their other half when it comes to their access to money and visibility of their overall financial position.
This tends to worsen at the point of separation or divorce as the financially stronger spouse tries to punish the other, either for what they perceive to be the reason for the marriage ending or simply to seek to gain a financial advantage in the proceedings.
Such behaviour can include cutting off financial support such as:
- access to credit cards;
- diverting their salary from a joint account to a sole account;
- ceasing the payment of private school fees; or
- refusing to pay legal fees to enable independent advice in relation to the divorce and associated financial matters.
The good news is that there is recourse through the family courts to address any interim challenges that spouses face during the divorce process. This includes the ability to apply for interim maintenance if financial support has been cut off and for legal fees to be met. It is also the Court’s aim to ensure that the overall division of spouses’ finances on divorce provides both spouses with as much financial independence as possible. Whilst it is generally possible for there to be a complete ‘clean break’ and cut off in relation to the pot of assets such as any properties, savings and pensions, it may not be achievable to cut ties completely as it is often necessary for spousal and child maintenance to be paid on a monthly basis.
Moving to financial independence
The first steps to financial independence start with regaining your confidence. Take your time and don’t feel pressured into making any rash decisions. If you are uncertain about anything then take a step back or call upon a trusted friend, relation or professional to be by your side. You’ll need to evaluate what is left and make sure that everything is finalised. Don’t be put off working alongside professionals who are able to help guide you and provide suitable advice.
Getting yourself back on track with your finances may seem daunting and challenging but there are plenty of services available to you to help you navigate the world of finance. Your change in lifestyle and obligations can seem overwhelming at the start so it’s important to take things at your own pace.
A few things to consider when moving towards financial independence:
- Everyday money: it’s likely you’ll need to open a new personal account and start applying for a credit card. Having a personal account and at least one credit card in your name will enable you to build your own personal credit history.
- Budget: work out your new household budget, spending habits will have changed. As a single woman and possibly a single mother, your financial status may change dramatically after leaving your partner. Estimate your current living expenses, including any money you may spend on children. If you can’t maintain your current lifestyle, consider cutting back on expenses or finding additional sources of income.
- Savings: if you don’t already have a cash buffer then it is generally advisable to start putting money towards 3-6 months of your outgoings in a readily available cash savings account to meet any unexpected expenses (and instead of resorting to expensive credit lines)
- Cash flow planning: current and future requirements and how these may be met. Look at your financial and life goals and figure out what is comfortable to you and your family. Consider what your needs and wants are over your lifetime and assess the implications if these aren’t met.
- Retirement Planning: What does retirement look like for you? Is there a pension or retirement plan from current or previous employer? Depending on your age, income level, dependents, health and current assets it’s important to think about your retirement plans sooner rather than later to give you the opportunity to make required and affordable contributions towards them.
- Investments: work with an investment manager who understands your knowledge base, circumstances and can work with you to develop an updated and realistic investment plan. They will be able to educate you on investments (if this is something you haven’t’ dealt with previously) and will analyse your risk tolerances and keep you up to date with your portfolio performance.
- Your Credit Rating: this may be affected by your partner’s actions and could potentially impact your chances of obtaining a mortgage. Check your rating as soon as possible and use it to cross check any joint accounts you may have, so that you can cancel them
- Children: consider and calculate the cost of raising your child as though you were a single parent, work with your solicitor to ensure that maintenance payments are fair
- Insurances: Check your insurances and speak with your financial advisor to ensure that the terms of all policies are adequate, affordable and suitable for your change in circumstances.
- Assets & Liabilities Schedules: what assets are held in your name, such as home, pensions, investments, jewellery, cars
- Organising and Keeping Records: including your Financial Records (such as share certificates or bank statements), Legal Documents (such as birth certificates and marriage certificates), Property Documents (such as deeds and contracts), Health Records, Expense Documents (such as receipts or bills)
- Update your Will: Whether you have formalised a divorce or ended a long term partnership it is important for you to update your Will. This ensures that your wishes for your estate are legally documented and reduces confusion or delay in distribution to your loved ones.
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