Divorce Finances

In a divorce, either party can apply for the following types of financial orders:

Lump sum payments: One spouse pays a one-off or a series of lump sums to the other.
Property adjustment orders: The court can order the transfer or sale of property (e.g. the family home).
Spousal maintenance: Ongoing financial support paid by one spouse to the other during the proceedings and thereafter.
Pension sharing orders: Dividing one spouse’s pension assets.

The court aims for a fair division of assets, guided by the principle of fairness and the overriding objective of meeting both parties' needs and the needs of any children. The key factors the court will consider are:

The welfare of any children of the family:
The needs of children under 18 are the court’s first priority.

Income, earning capacity, property, and financial resources: The court considers the current and potential future income and assets of both parties.

Financial needs, obligations, and responsibilities:
The financial needs of both spouses (e.g., housing, daily living expenses) are taken into account.

The standard of living during the marriage:
The court will try to maintain a similar standard of living, though it may not always be possible. Both parties will often suffer a deterioration or reduction in their living standards.

Age and duration of the marriage:
‍A longer marriage may result in a more equal division of assets, whereas short marriages may focus on returning each party to their pre-marriage financial position.

Physical or mental disability:
‍If one spouse has special needs due to disability or ill health, the court will make provisions accordingly.

Contributions to the marriage: This includes both financial contributions (e.g., income) and non-financial contributions (e.g., homemaking, child-rearing). However, contributions are only taken into account in exceptional circumstances.

Conduct:
‍It is rare for the court to take another party's conduct into account. A party seeking to rely upon the other person's conduct will have to show a connection between the conduct and the resulting financial loss.
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Loss of benefits: The court may consider if one spouse will lose certain benefits (e.g., pension rights) due to the divorce.

The courts generally apply the following key principles when deciding on the division of assets:

‍Needs:
The first priority is meeting the needs of both parties,     particularly housing needs and ongoing financial support.

‍Compensation:    
The court may compensate one spouse if their earning potential has been negatively impacted by the marriage (e.g., by giving up a career to raise children).

‍Sharing:    
Where possible, the court aims to divide marital assets equally. However, the division is often adjusted to meet the needs and resources of each spouse.

The court considers all assets when making financial orders, including:

Matrimonial assets:
‍Assets acquired during the marriage, such as the family home, savings, pensions, and investments.

Non-matrimonial assets:
Assets brought into the marriage by one party or inherited. These are not always divided equally but may be considered if needed to meet one party’s financial needs.

Pensions:
‍Pensions are often the most valuable asset after the family home. The court can issue a pension sharing order to split one spouse’s pension rights between both parties.

Spousal maintenance (also called periodical payments) may be awarded if one spouse cannot meet their financial needs following the divorce.

The amount and duration of maintenance depend on factors like the length of the marriage, each party’s earning potential, and whether the recipient can become financially independent over time.

Maintenance can be awarded for a fixed term or for life, but recent trends favour "clean break" settlements where possible.

A clean break means no ongoing financial ties, and neither party can make any future claims.

Child maintenance is separate from the financial settlement between spouses. The non-resident parent usually pays it to the parent with whom the child lives.

If parents can agree on the amount, they can make a private arrangement. If not, the Child Maintenance Service (CMS) can calculate and enforce the payment based on the paying parent’s income.
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The courts prefer a clean break where possible, meaning that after the division of assets, neither party has ongoing financial claims against the other. A clean break may not always be possible, especially if one spouse cannot meet their financial needs without ongoing support (e.g., through spousal maintenance).

Both parties must provide full and frank disclosure of their financial circumstances. This means that all assets, income, debts, and pensions must be disclosed.

If either party attempts to hide assets or undervalue their finances, the court can impose penalties, and the other party may reopen the case if deceit is discovered later.

If you believe that your spouse is attempting to move or hide assets, CH Family Law Ltd offer free, initial advice on how to guard against this.

Once the court issues a financial order, it is legally binding. If one party does not comply (e.g., failing to pay maintenance), the other party can take enforcement action through the courts.

Couples are encouraged to reach a financial settlement without going to court, either through negotiation, mediation, or the collaborative law process.

It is essential to have skilled third party solicitor like CH Family Law Ltd to act on your behalf.

If an agreement is reached, it can be made legally binding by submitting a consent order to the court.

While not legally binding in England and Wales, courts will take these agreements into consideration, especially if they are fair and both parties entered into them freely with full disclosure of financial information.
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Prenuptial and postnuptial agreements are agreements between spouses setting out how their assets will be divided if the marriage ends.

The court fee for filing a financial application is £303 (as of April 2024). The court fee for filing a consent order is £58. Legal costs can vary widely depending on the complexity of the case and whether it goes to court. Settling outside of court through mediation or negotiation can help keep costs lower.

CH Family Law Ltd offers a fixed fee service, inclusive of all legal costs. We charge the same amount regardless of the number of calls, email or letters to the other side.

Initial advice is free and easy. Contact us now to book a consultation.