Divorce and Money : A Guide to Financial Settlements

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Divorce not only takes an emotional toll but can also hit finances, with legal fees being the most common divorce cost in the UK, with an average spend of £14,561. (Legal aid may be available in specific circumstances, such as cases involving domestic abuse).

When one household splits into two after a divorce, the two new divorced households each have less wealth than the combined married household did. Data from the Wealth and Assets Survey (ONS) shows that 36.5% of divorced households have less than £85,000 of total household wealth, compared to 12% of married households. In contrast, 26.5% of divorced households have more than £500,000 of total wealth, while 50.5% of married households have this much.

The data also indicates that divorced men generally have more wealth than divorced women. The median wealth for divorced women is between £85,000 and £200,000, while for divorced men, it is between £200,000 and £300,000.

One of the main factors that must be considered when going through the breakdown of a marriage or civil partnership is money. This includes decisions about the family home, pension sharing, child maintenance, and spousal maintenance.

Divorce and money – How is money divided?

Reaching an agreement with your ex partner on financial matters is often the preferred route. It can help avoid the need for court proceedings and reduce costs. If you and your ex-partner can agree on how to divide money and property, you can apply for a consent order to make it legally binding.

This is an important step to ensure that the agreement is enforceable in the future. However, if you cannot reach an agreement, you may need to apply to the courts for a financial order.

Divorce financial proceedings are known as financial remedy. Financial remedy proceedings usually take place as part of the divorce settlement, before the Decree Absolute/ Final Order is obtained.

Financial settlements

A financial settlement or financial remedy in the context of divorce is the point at which the division of assets and other financial agreements are decided upon and recorded as a binding financial order.

It is the process through which the money and assets of a married couple are divided when they are going through a divorce or in a civil partnership dissolution. This settlement can be agreed upon without the need for court intervention through negotiation and financial disclosure between solicitors.

However, in cases where mediation and negotiation fail, the court will decide on the division of assets. The court’s decision will be made on a case-by-case basis, considering a wide variety of influencing factors, and will be recorded as a binding financial order.

This order ensures that the agreement is enforceable in the future. The court will consider various factors such as the length of the marriage or civil partnership, each party’s financial situation, their contributions to the family, and the needs and welfare of any dependent children.

The starting point for the division of assets is usually a 50/50 split, although the court holds ultimate authority in determining settlements, impartially treating both homemakers and breadwinners.

In cases of long-term marriages where one partner left employment to care for children, it is probable that they may be granted an equal share of the combined assets. They are also likely to be entitled to a significant chunk of their ex’s income until they retire, and half their ex-partner’s pension entitlement.

A financial settlement can also include a clean break order, which aims to sever all financial ties between the parties. This ensures that neither party can make any future claims against each other’s assets or income.

To make a financial settlement legally binding, a consent order must be drafted and approved by a judge after the first part of the divorce process (decree nisi) has been pronounced.

This legal document confirms both parties’ agreement on the division of assets and ensures that the agreement is enforceable in the future.

It is important to seek legal advice when preparing a financial settlement, especially if your financial affairs are complex or if there has been a severe breakdown in communication.

A solicitor can help ensure that your interests are protected and that the settlement is fair and legally binding.

What factors are considered when determining a financial settlement in a divorce?

When determining a financial settlement in a divorce, the court considers a variety of factors to ensure a fair and equitable division of assets and finances between the parties involved. These factors may include:

The Length of the Marriage or Civil Partnership:

The duration of the relationship is a key factor in determining the financial settlement. Longer marriages or civil partnerships typically result in a more equal division of assets.

The Age and Health of Each Party:

The court takes into account the age and health of each party, as this can impact their earning potential and financial needs.

The Income and Earning Potential of Each Party:

The court considers the current income and future earning potential of each party to ensure that both can meet their financial needs post-divorce.

The Standard of Living During the Marriage or Civil Partnership:

The court aims to provide a financial settlement that allows both parties to maintain a standard of living similar to that enjoyed during the marriage or civil partnership.

The Contributions of Each Party to the Marriage (Financial and Non-Financial):

This includes both financial contributions and non-financial contributions, such as caring for children or maintaining the family home.

Any Prenuptial or Postnuptial Agreements in Place:

The court will consider any existing legal agreements regarding the division of assets and finances.

The Needs of Any Children Involved:

The welfare of any dependent children is a primary consideration in determining the financial settlement.

The Existence of a Clean Break or Ongoing Financial Support:

The court will consider whether a clean break, which severs all financial ties, is feasible or if ongoing financial support such as spousal maintenance or child support is necessary.

These factors are taken into account to ensure that the financial settlement is fair and provides for the needs of both parties and any dependent children. It’s important to seek legal advice to understand how these factors apply to your specific situation and to ensure that your rights and interests are protected during the divorce process.

Divorce and money – which assets will be split?

The court considers a wide range of factors to achieve an equitable distribution. The types of assets that are typically considered include:

Family home

The marital home is often the most significant asset. Regardless of whose name is on the title, the family home is usually considered a matrimonial asset and is subject to division.

Joint accounts and investments

Any savings, bank accounts, stocks, bonds, and other investments held jointly by the couple are included in the matrimonial pot.

Individual savings and investments

Savings and investments held in individual names may also be considered, especially if they were accumulated during the marriage. The court will look at the source of these funds and their use in the marriage.


Pensions are a significant part of financial settlements. Both private and state pensions accumulated during the marriage can be divided, or their value can be offset against other assets.

Business interests

Any businesses or shares in businesses acquired or developed during the marriage are considered matrimonial assets. The court will assess the value of the business and each party’s contribution to it.


Cars, motorcycles, boats, and other vehicles purchased during the marriage are typically included in the asset division.

Personal belongings

Items such as furniture, electronics, jewellery, and other household goods acquired during the marriage are usually considered part of the matrimonial assets.


Liabilities and debts incurred during the marriage, such as mortgages, loans, and credit card debts, are also taken into account. The court will consider how these debts were accumulated and who benefited from them.

Inherited assets

Inherited assets can be complex. While they are often considered separate property, they can become part of the matrimonial assets if they have been mingled with marital finances or used for joint purposes, such as purchasing the family home.

Future earnings and career prospects

The court may also consider the future earning potential and career prospects of both parties, particularly if one party has sacrificed their career to support the family.

What type of orders can be made in relation to divorce and money?

In the context of divorce, various types of court orders can be made in relation to the division of assets and financial arrangements. These orders are essential for providing legal clarity and protection for both parties involved. The following are the most common types of court orders:

Consent Orders:

If an agreement on asset division can be reached, it can be made into a Consent Order and submitted to the court for approval. This order is for couples with more complex financial settlements.

Property Adjustment Orders:

These orders redistribute property ownership between the parties.

Lump Sum Orders:

A lump sum order involves a one-time payment, usually to balance the division of assets.

Periodical Payments Orders:

These orders establish ongoing maintenance payments, such as spousal maintenance or child maintenance.

Pension Sharing Orders:

This type of order divides pension assets between the parties.

Clean Break Orders:

A clean break order severs all financial ties between the parties, preventing either party from making a future financial claim on the other.

These court orders are designed to address various aspects of asset division and financial arrangements, providing a legal framework for the fair and equitable resolution of financial matters in the context of divorce.

How can Expert Family Law’s panel of divorce solicitors help?

If you are married or in a civil partnership and need advice on divorce and money, contact us today. Our panel of solicitors can deal with all aspects of a divorce, including ancillary relief and the splitting of assets between parties to a divorce. The breakdown of a marriage is never easy, and we aim to ensure the process of navigating divorce and money is as stress free as possible.

We ensure that the divorce solicitors on our panel have the skills and experience required to assist on your legal case. We can assure you that your case will be dealt with in a compassionate and understanding manner.

The solicitors on our panel can assist you through the process of divorce, including the application, as well as assisting you with child arrangements, financial settlements and ancillary relief following the termination of your marriage.

Get in touch today using the form at the top of the page to find out if a divorce solicitor from our panel could help on your case.

Please note we are not a firm of solicitors. We maintain a panel of trusted and regulated legal experts. If you contact us in relation to a case, we may pass your case on to a panel firm in return for a fee from our panel firms. We will never charge you for passing on your case to a panel firm.


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