Separation financial advice needed

ignatiuspennyfeatherix

Advise needed on options if possible please.

I am separating from my long term partner. We have 2 young boys together and currently own a house we all live in. Due to the large difference in our incomes I am keen to find out the best option to move forward for her first so she is settled and I can work around that. She works part time and has no option to purchase a home with the equity from the sale of our house so renting is her only feasible option. I am unsure of her best options regarding benefits though. I could continue to live in the current home but can’t afford to buy her out so I’m not sure if by her staying on the mortgage even if not contributing it hinders the amount she can claim on universal credit for her rental costs. Equally if we sell the house I believe this would mean she can’t claim anything as she would have money in the bank so rather than keeping this for a potential future house purchase she will have to live off it until it runs out and then can claim for support. I am happy to stay in the current house or sell as I can make either work I just want to understand her best option first. Just wondered if others have been in a similar situation or anyone who knows what the options are, thanks

Caz3121

how much equity is in the current property?
If owned jointly 50% of that equity would be deemed to be hers and could affect benefit claim unless the property is being marketed for sale

ignatiuspennyfeatherix

Likely to make around 110k after fees and split 50:50 on current valuation. I have seen about potential court orders that can prevent a shared home being sold until the kids reach 18, do you know if we applied for this order it could mean I stay in the house with her on the mortgage as well but it not count against her being a home owner with regards to UC claim as there is an order preventing the sale as an option? 

tacpot12

I think her best option is to stay in the family home, and to claim Universal Credit. She won't get any help with her mortgage cost, but she will get help with the cost of the children, and you will be paying her child maintenance, which means she might be able to afford to pay her half of the mortgage. This leaves you paying half the mortgage, and having no capital to buy somewhere to live.  

You can use the benefit calculator at entitledto.co.uk to check what she would receive on UC (assuming you know here income from her work), and you can use the child maintenance calculator at Calculate your child maintenance - GOV.UK (www.gov.uk) to check what child maintenance you should be paying her. I would start by assuming that children will spend one to two days a week with you. 

She will also be receiving Child Benefit which you should include when calculating her income. 

If you pay half the mortgage and the child maintenance, I expect you will be left with more than half your income to try to buy somewhere for you to live. This might mean renting somewhere very cheap initially, and saving hard. Ultimately, you might end up owning 1.5 houses, but your children will not remain young forever, and your partner may find someone else she wants to live with and they will either buy you out, or want to sell the property so that they can move somewhere else. These things have a habit of working themselves out, but the situation can look very grim when you first move out.

If you were to sell, and she cannot buy, she will have to rent, and she will not be able to claim UC until she has reduced the amount of her savings to below £16,000. She can do this buy paying rent, and by paying for the other the necessities of life, e.g. council tax, energy, replacement appliances, food, etc. She  should keep a record of how she has spent the money to protect herself from the DWP asserting she has deprived herself of the capital.

pinkshoes

ignatiuspennyfeatherix said:

Likely to make around 110k after fees and split 50:50 on current valuation. I have seen about potential court orders that can prevent a shared home being sold until the kids reach 18, do you know if we applied for this order it could mean I stay in the house with her on the mortgage as well but it not count against her being a home owner with regards to UC claim as there is an order preventing the sale as an option? 

The norm is that the parent that does the majority of the childcare is the one who stays in the family home. If that's you then this might be sensible. I don't think you need a court order if you are both in agreement.

But I'm thinking that if she only works part time, is this because of childcare needs? And if not, could she not get a full time job? 

It's quite normal that due to the cost of running two households, working part time might not now be an option for her.