Understanding Economic and Financial Abuse: What You Need to Know

In our divorce business, we regularly focus on the issues around Domestic Abuse. In September, the team are running and walking 60 miles each as part of the “Step Forward Challenge” with Women’s Aid to try to stop Domestic Abuse, and so this felt a good time to talk about two lesser known facets of Domestic Abuse that you might spot in your friends and family.    

When we talk about domestic abuse, physical violence often comes to mind first. However, abuse can take many forms, and two of the most insidious are economic and financial abuse. These forms of abuse can be just as damaging; trapping victims in relationships where they feel powerless and unable to leave. Let’s take a closer look at what economic and financial abuse are, how they work, and what you can do if you or someone you know is affected.    

What is Economic Abuse?    

Economic abuse occurs when one person in a relationship controls another person’s access to money, resources, or financial independence. Financial abuse is a subsection of economic abuse. The aim is to make the victim financially dependent, limiting their ability to make decisions, support themselves, or leave the relationship. This type of abuse can take many forms, including:    

1. Controlling Access to Money: The abuser might restrict the victim’s access to bank accounts, credit cards, or cash. They may give the victim a small "allowance" and demand receipts for every penny spent.
2. Preventing Employment: An abuser may stop the victim from getting or keeping a job, making it difficult for them to have their own income. They might do this by sabotaging job interviews, turning up at the workplace unannounced, or making the victim late for work.
3. Accumulating Debt in the Victim’s Name: The abuser might take out loans or credit cards in the victim’s name without their consent, ruining their credit score and creating financial difficulties that are hard to escape.  
4. Stealing or Taking Money: Some abusers simply take money from their victims, emptying their bank accounts or demanding money under threat of violence or emotional manipulation.
5. Manipulating Benefits: The abuser might control access to welfare benefits or fraudulently claim benefits in the victim’s name, leaving them with nothing.    

The Impact of Economic and Financial Abuse    

The effects of this abuse can be devastating. It can trap victims in abusive relationships because they feel they have no financial means to leave. It can lead to long-term financial difficulties, such as poor credit ratings, debt, and poverty. The stress and anxiety caused by financial abuse can also lead to serious mental health issues.    

Victims often feel isolated and helpless, especially if they are unaware that what they’re experiencing is a form of abuse. Many feel ashamed or embarrassed, which can stop them from seeking help, and many don’t realise they have been being abused because it has become the norm or crept up on them slowly and subtly.          

Recognising the Signs    

Recognising the signs of economic and financial abuse is the first step to breaking free. Here are some red flags to watch out for:    

• Your partner demands control of all your finances or closely monitors your spending.  
• You are not allowed to have your own bank account or credit card.  
• Your partner insists on knowing how every penny is spent and may get angry if you spend money without permission.  
• You are discouraged or prevented from working or pursuing education or career opportunities.  
• Your partner takes out loans or credit in your name without your consent.    

If you recognise any of these signs in your relationship or someone else’s, it’s crucial to seek help.    

What to Do if You’re Affected    

If you are experiencing economic or financial abuse, know that you are not alone, and help is available. Here are some steps you can take:    

1. Reach Out for Support: Contact organisations like Women’s Aid or Refuge, which offer confidential advice and support. In the UK, the National Domestic Abuse Helpline is available 24/7 on 0808 2000 247.    
2. Keep Records: Try to keep a record of any financial abuse, such as taking screenshots of bank statements or keeping copies of important documents.    
3. Seek Legal Advice: Legal advice can help you understand your rights and options. Organisations may offer free legal advice to victims of domestic abuse.    
4. Plan for Safety: If you’re planning to leave, make sure you have a safety plan. This might include setting aside emergency funds, gathering important documents, and having a safe place to go.    
5. Inform Your Bank: Many banks in the UK have policies to support victims of financial abuse. Let your bank know about your situation—they may be able to offer additional security measures or advice.    

Conclusion    

Economic and financial abuse is a serious issue that affects many people, often in ways that are hidden from view. Understanding this type of abuse is the first step towards breaking the cycle and regaining control of your life. If you or someone you know is experiencing financial abuse, remember that help is available, and it’s never too late to seek support.    

By raising awareness and supporting each other, we can work towards ending this form of abuse and ensuring that everyone has the financial independence they deserve.    

How Smart Financial are trying to help    

The entire Smart Financial Team have signed up to take part in the “Step Forward Challenge” and are running or walking 60 miles in September.    

Tamsin Caine, Director of Financial Planning, was keen to get involved. “As a divorce specialist, sadly a large majority of our new divorce clients are victim survivors of domestic abuse. We are passionate about making a difference to their lives. This challenge is another way we can help.”    

Smart Financial CEO, Steven Martin feels, “this challenge aligns with our company values, healthy mind healthy body. The team were all enthusiastic about the idea. Now we need to complete the miles and raise some money!”    

You can support us using the link https://womensaidfederationofengland.enthuse.com/pf/smart-financial.