Splitting Assets: Your Financial Rights on Separation
When a marriage or civil partnership ends, dividing your finances can be one of the most complex and contentious parts of the process. This guide explains your financial rights and options under English law.
Financial settlements: the basics
A financial settlement is a legal agreement that sets out how money and property will be divided when you divorce or end a civil partnership. It can include:
- The family home and other property
- Savings and investments
- Pensions
- Business assets
- Ongoing maintenance payments
- Division of debts
Financial settlements are separate from the divorce itself – getting divorced doesn’t automatically sort out your finances.
Starting point: 50/50 split?
Many people assume assets should be split equally, but English law doesn’t automatically provide for a 50/50 division. Instead, the court applies the principle of “fairness,” considering all circumstances.
The starting point is often equal division, but this can shift depending on factors like:
- The length of the marriage
- Each person’s financial needs, especially for housing
- Childcare responsibilities
- Income disparities
- Each person’s contributions (financial and non-financial)
The court’s considerations
If your case goes to court, judges must consider specific factors from the Matrimonial Causes Act 1973, including:
- Welfare of any children under 18 (the first consideration)
- Income and earning capacity now and in the foreseeable future
- Financial needs, obligations and responsibilities
- Standard of living enjoyed during the marriage
- Age of each party and length of marriage
- Contributions made to the welfare of the family (including looking after the home or caring for family)
- Conduct, but only if it would be inequitable to disregard it (rare)
- Value of any benefit (like a pension) that one party will lose due to divorce
Options for reaching a financial settlement
1. Negotiation between partners
If you can communicate amicably, you might agree on division directly. Always have any agreement reviewed by solicitors and made legally binding through a consent order.
2. Mediation
A trained mediator helps you discuss options and reach agreement. This is often faster and less expensive than court.
3. Collaborative law
Each person appoints a collaboratively trained lawyer, and everyone works together in meetings to reach agreement.
4. Solicitor negotiation
Solicitors negotiate on your behalf, which is helpful when direct communication is difficult.
5. Court proceedings
If other methods fail, either party can apply for a Financial Remedy Order. The court process typically involves:
- Form A application
- Financial disclosure (Form E)
- First Appointment hearing
- Financial Dispute Resolution hearing
- Final hearing (if no agreement reached earlier)
Common financial orders
Property Adjustment Orders
These determine what happens to property, typically:
Sale and division of proceeds
Transfer to one party (often with a lump sum payment to the other)
Deferred sale (often until children reach 18)
Lump Sum Orders
A one-off payment from one party to the other.
Pension Sharing Orders
These divide pension assets, giving each person a percentage of the total.
Spousal Maintenance Orders
Regular payments from one party to the other, which can be:
- For a fixed period (“term orders”)
- Until the recipient remarries or either party dies (“joint lives orders”)
- Capitalized into a lump sum
Clean break or ongoing support?
A “clean break” settlement ends all financial ties between you, with no ongoing maintenance. Courts favor this approach where possible.
However, ongoing maintenance may be necessary when:
- One party has significantly lower earning capacity
- One party needs time to become financially independent
- One party has significant childcare responsibilities limiting earning potential
Protecting your agreement
Any agreement must be made legally binding through a court order. Without this, either party could make further financial claims in the future, even years after divorce.
Unmarried couples
Cohabiting couples don’t have the same rights as married couples or civil partners. There’s no such thing as a “common law marriage” in English law. If you’re unmarried:
- Property rights depend on legal ownership and contributions
- No automatic right to maintenance
- Different laws apply (primarily property and trust law)
Disclaimer: This article provides general information about financial settlements in England and Wales as of April 2025. It is not legal advice, and laws can change. Your individual circumstances may affect how the law applies to your situation.
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