Complete Guide to Divorce Settlements in the UK

When a relationship breaks down, and divorce becomes the only option moving forward, it can be hard to sit down and fully consider every issue related to your joint finances and assets yourself. Especially if there are children involved that you have to care for too.

Not least because you will be going through a stressful and turbulent time in your life, but finances and property acquisition can be tricky subjects even at the best of times.

As well, you may have heard some myths surrounding divorce settlements that may not necessarily be true, which can complicate your position when attempting to negotiate a settlement. For example, people always presume divorce settlements are split 50/50 in the UK, but that’s not always the case.

Expert divorce solicitors like ours at Brown Turner Ross can help you protect your assets and ensure that your divorce is as uncomplicated and fair as possible.

How Courts Divide Assets in the UK

What you are entitled to in your divorce settlement is dependent on your individual circumstances.  Usually, a good starting point is 50/50, but numerous factors will go into the court’s decision to split the matrimonial assets.

Matrimonial assets are assets that were acquired by either party while married or with income earned while married. Generally, the two largest matrimonial assets are the family home and either party’s pension. Also included is:

• Other real estate properties.
• Savings accounts and banked cash.
• Vehicles.
• Stocks and investments.
• Businesses.

Anything that you or your partner owned before marriage (or after if it were purchased using non-matrimonial funds) is considered non-matrimonial.

Typically, non-matrimonial assets will be excluded in a divorce settlement. This is unless the matrimonial assets do not add up to a sufficient provision for either party or the non-matrimonial assets were brought into and used during the marriage.

If you are wondering what is considered personal property in a divorce in the UK, this is legally referred to as chattels. Chattels include any personal possessions that are not classed as matrimonial assets, financial assets, or real estate.

While you may feel a sentimental attachment to some form of chattel, if the property was bought during the marriage or with matrimonial funds, then it is up for debate as to who will be granted possession of the item.

When Settlements Aren’t 50/50

A 50/50 split is only a guideline for the courts, and it is often the case that it will be rejected if it fails to meet the basic needs of both parties.

Instances where a 50/50 division fails include:

The Needs of Children

In most instances, the primary caregiver for the children affected by the divorce will receive a larger share of assets, and the right to remain in the home to ensure stability for the children.

Earning Capacities

If one spouse earns considerably less or has sacrificed a career to raise the family, a higher percentage of spousal maintenance may be granted to avoid significant financial hardship.

Length of Marriage

The length of the marriage can affect how finances are divided after divorce, with shorter marriages often resulting in each person keeping what they owned before marriage.

Valid Pre/Post-Nuptial Agreements

Legal agreements signed before or during the marriage can specify a division of assets that courts will enforce if they find it fair.

How are Assets Split in a Divorce Settlement in the UK?

In the UK, divorce settlements typically aim to achieve a 50/50 split for both parties. However, this split is often not met due to other circumstances that arise, meaning that one party receives a larger portion of the matrimonial assets than the other.

Courts must consider several factors included in the Matrimonial Causes Act 1973 and the Civil Partnership Act 2004 when dividing assets in a divorce in the UK.

This includes the income and financial needs of each party as well as the family’s standard of living before the marriage began to collapse.

In terms of income, if either party has a high earning potential for the foreseeable future, then this will be accounted for. Property and other financial assets are also included.

The income is then considered against the financial responsibilities that each party has or will have in the future, and the contributions that have already been made to the welfare of the marriage or contributions that will need to be continued.

Finally, if the conduct of either party to the marriage was so severe that it would be unfair to disregard it then this will be taken into account. This will be for very severe cases, for example domestic abuse with long term lasting effects.

In the case of adultery, the innocent party may expect to receive a larger financial settlement (usually as a result of resentment towards the adulterer) but this is not the case. The court will not take adultery into account, and if this ends up going to court then all it will do is make the process more expensive for both parties.

According to the court, each party to the marriage should try to be as self-reliant as possible with their income. When this is not possible due to healthcare, childcare, or other financial responsibilities that limit their earning capacity, there will be court intervention by way of splitting assets or settlement/maintenance payments.

Do I Need to Go to Court to Decide on a Financial Settlement?

No, if you and your former spouse can agree on a financial settlement that suits both of you then court may not be necessary.

However, it is advised that you discuss with your lawyer what settlement plan you and your former spouse are proposing because you may not be fully aware of the value of some of your joint assets like pensions.

What Happens When You Don’t go to Court

If you choose not to go to court for a financial order then your former spouse could potentially file a financial claim at any point in the future provided that you have not remarried.

Also, be aware that this settlement will not be legally binding and your former spouse could change the terms of their agreement at any point. To prevent this, you should have the court approve your agreement through a consent order.

A consent order legally binds your financial settlement and can be drafted by your solicitor on your behalf. You and your partner will have to sign the document and send it into the court along with the court fee of £50.

If you are not dividing assets between you and you both want to walk away from the marriage as is then a clean break order will suffice. This will provide you with protection from your former spouse seeking a financial settlement years after you divorce, as you may have heard of happening from a number of high-profile cases in the media.

Typical UK Divorce Settlements

We will list a couple of examples of simple divorce settlements below to highlight how a ‘fair’ divorce is a spectrum influenced by the personal circumstances of both parties.

Example one: John and Betty.

John and Betty have been married for 10 years. They have no children, and have had similar incomes with a comparable trajectory for their earning potential since they got married and are still in the same job roles.

Betty files for a divorce because John has committed adultery, which John does not contest.

Despite the adultery offence, a fair divorce settlement in this instance would be a 50/50 split of all matrimonial assets with no spousal maintenance or investigation into non-matrimonial assets.

Example two: Stewart and Rose.

Stewart and Rose have been married for 18 years. They have two children, and Rose stopped working to look after them. Stewart supports the family with his income.

A fair divorce settlement may be reached in this case by allowing Rose to keep the family home where she will raise the children. Stewart will have to pay child maintenance and spousal maintenance for a set period of time.

Example three: James and Grace.

James and Grace were only married for a couple of years and did not live together before their marriage. They have no children.

The fairest divorce settlement in this instance may be for each party to walk away with what they brought into the marriage, with no entitlement to the other’s possessions, pensions, or other assets.

Example four: Frank and Emily.

Frank and Emily have been married for 12 years. They have no children, and Emily earns more than Frank with a likelihood that her income will keep on increasing over the next few years.

A fair divorce settlement in this case may mean that Frank receives a larger share of the matrimonial assets, with Emma not being required to pay spousal maintenance.

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Frequently Asked Questions

Does the woman get the biggest split in a divorce?

This is a complete misconception; the division of assets is not decided based on gender, but rather on personal circumstances.

Who keeps the house after a divorce?

Who keeps the house depends on affordability, mortgage capacity on a single income and whether there are children involved who need stability.

Are pensions split after divorce?

Yes, pensions accumulated during the marriage can be addressed via pension sharing, offsetting against other assets, or earmarking.

What is included in a marital pot?

Savings, investments, vehicles, business assets and joint or individual debts.