Ex-wives suffer as bankers apply to reduce pay-outs

Divorced partners of City bankers are the latest group to be hit by the twin financial blows of the credit crunch and the government's crackdown on the bonus culture as they face reductions in their divorce settlements.

Family law firms say there has been a massive increase in the number of applications from financiers trying to alter the level of maintenance they pay their former spouses after losing either their job or their bonus package.

According to lawyers, payments in divorce settlements were often calculated with future bonuses factored in, but given the hostile climate that now exists towards the City many of those payments have been reduced - meaning bankers are having trouble meeting their commitments.

Ann Ison, partner at Hughes Fowler Carruthers told the Financial Times her company had seen a definite increase in the number of people trying to "vary orders" in the last 18 months.

Julian Lipson, partner and head of the family law at legal firm Withers, said that the number of applications at his firm had doubled.

"If a divorce deal was negotiated in the past, circumstances are often now very different and the level of maintenance provided now is no longer reasonable," he told the FT.

He added that the courts are taking an increasingly sympathetic attitude towards the pleas of the newly impoverished City boys.

However, another lawyer warned that if a case ended up in litigation, the legal costs could actually be more expensive than the costs of getting divorced in the first place. ·