Divorce settlement: what are you entitled to?

No-fault divorce laws were introduced in England and Wales in April 2022 to make it simpler for warring couples to separate. You can now simply say that your marriage has broken down, rather than needing one person to take the blame, in order to get a divorce.

While the divorce process should be quicker, less acrimonious and hopefully cheaper in the long run, you still need to sort out the finances. This includes what happens with the family home and other assets, as well as the care of any children.

In this article, we explain:

• What is a financial settlement?
• What am I entitled to in a divorce settlement?
• How does the court decide what is a fair divorce settlement?
• Can an ex husband, wife or civil partner claim for property after a divorce?
• How do we separate our finances in a divorce?
• Does getting a divorce cut my financial ties with my ex?

Related content: How to cut the cost of divorce

What is a financial settlement?

A financial divorce settlement is an agreement between you and your ex on how to separate your money and assets once the marriage is over.

You can draw one up at any point during divorce proceedings or civil partnership dissolution.

Once you have reached an agreement, a solicitor will draft a consent order to make it legal binding. This legal document confirms both parties’ agree on the division of assets.

It needs to be approved by a judge, after the first part of the divorce process (decree nisi) has been pronounced. 

NOTE: In England and Wales, getting divorced does not end your ability to make any financial claims against the future earnings your ex, or them against you.

The law is different in Scotland because you can’t make a claim for financial provision after divorce.

What am I entitled to in a divorce settlement?

What you are entitled to in a divorce depends on a number of factors. And there are no specific guaranteed entitlements for either party.

Each situation is unique and will be treated as such by the courts. But the type of things you might be entitled to include matrimonial assets such as:

• Money, including savings and investments
• Property, including the family home and any property they own individually
• Pension
• Life insurance policies
• Businesses
• Furniture and appliances
• Vehicles
• Financial support such as Child maintenance and Spousal maintenance payments

Non-matrimonial assets are treated differently to matrimonial assets. In other words, those that were acquired during the marriage.

The financial assets that were acquired before or after the marriage are considered a non-matrimonial asset. These are usually protected by a pre-nuptial agreement, if one is in place.

To reach a settlement you also need to consider the division of any debt, loans or credit cards you both have.

How does child maintenance work?

If there are children involved, both parents are expected to pay towards the cost of raising them until they are at least 16.

You can either make an arrangement of who pays what between the two of you, or get the Child Maintenance Service involved.

It will work out how much should be paid, taking into account who the children live with and how much each parent earns.

If a parent who is supposed to pay maintenance lives abroad, you can make an application to the court for a child maintenance order. This can also be used where the parent liable for payment is particularly wealthy and if there are education expenses to be covered.

How do I prepare for a financial settlement?

Before you look to reach an agreement, you should sort out your day-to-day finances.

You need to agree with your ex who gets what and how you will continue to pay your bills.

1. Joint accounts

If you have a joint bank accounts, loans or credit cards, contact your bank or building society as soon as you know you are separating. Make sure any wages or benefits go into a new separate account.

If you think your ex may go on a spending spree you can seek to freeze your cards. Check out our article on whether a joint account is a good idea.

2. Other financial affairs

You should also assess your financial situation, both as individuals and a couple.

Try and build up a picture of your current state of affairs and work out:

• What you have
• How much you each owe
• How everything could be split

For example, if you have mortgage together, can one of you afford to keep up with repayments?

Or if you have a life insurance policy, you will need to agree how each policy will be dealt with. Will you continue to pay the premiums? Will the beneficiaries for life insurance change? 

3. Pensions

Pensions can be split in several ways. You could either get:

• Part of your ex’s pension pot now, which is transferred into your own pension scheme
• A lump sum when your ex retires
• The value of your ex partner’s pension could be offset against your own retirement savings, or other assets such as the family home.

Can we draw up the settlement by ourselves?

Couples living in England and Wales can sort out their financial settlement themselves.

If you agree you can draft what’s known as a consent order which is a legal document that explains how you’re going to divide up assets such as:

• Property
• Pensions
• Savings

It might also include clauses for child or spousal maintenance.

Once you have this draft, you need to send signed copies to the court to ask for its approval, which costs £53.

To make sure the consent order is legally binding, it should be drafted by a solicitor. Couples can also use a low-cost online solicitor service. This is becoming increasingly popular, lowering costs and speeding up the process.

NOTE: A DIY divorce is only beneficial if both parties are able to come to a mutual agreement without coercive influence. 

It is probably necessary to seek independent legal advice to draw up the financial settlement if:

• Your financial affairs are more complex
• You have been married for a long time
• There has been a severe breakdown in communication

You can search for a legal professional on the Resolution website.

If you go down this route, there is usually no court hearing. If the judge thinks the consent order is fair, they will simply approve it.

The situation is different in Scotland where a DIY divorce, called a “simplified” divorce or dissolution, is set out in law and is only open for certain cases.

In Northern Ireland, you must appear in court in person when you divorce although you can appear as a “personal petitioner“, without needing a solicitor.

Applying to the courts

If you are struggling to reach a financial settlement, you can use an independent mediator to try to find a way forward. If that fails you may have to apply to the court for it to decide how your affairs are split up. 

You must show that you have attempted mediation first, except in the case of domestic abuse.

Divorce proceedings also need to have been started before you go to court with a financial consent order, which needs to be sorted out before the break-up is finalised.

If you are both in agreement, there’s no need for a hearing. The judge will have the final say and if they don’t believe the consent order is fair, they can have it altered or a new one drawn up.

How does the court decide what is a fair divorce settlement?

How the court decides what is a “fair divorce settlement” depends on a number of factors, including:

• Each partner’s individual assets
• Contributions to the marriage or civil partnership, both financially and emotionally
• Time out of the workplace
• Earning capacity 
• Standard of living before the break-up
• Requirements such as catering for disabilities
• Length of marriage
• How old you both are

What is the starting point in deciding a financial settlement?

The starting point is a 50/50 split, though the court has the final say in all settlements. It will not discriminate between the homemaker and breadwinner. 

If a couple have been married for decades, it is likely that a partner who left work to raise the children might be awarded:

• Half the joint assets
• A significant chunk of their ex’s income until they retire
• Half their ex partner’s pension entitlement

By comparison, two young people with no children could just walk away with whatever they brought into the marriage.

NOTE: Children are given top priority by the courts, and any issues, including maintenance, will be dealt with separately. 

There really is no hard and fast rule as to exactly how all this will be worked out by the courts, though there are only general principles which the law follows. 

What you think is fair may not be what will legally happen. Why you got a divorce does not normally affect the financial settlement. So if one partner cheats, the court is very unlikely to decide that they should get less.  

How much will it cost to go to court?

How much you pay depends on the number of financial dispute resolution appointments that you need and if there will be a final hearing. The court cost is a set fee of £275.

Solicitors’ costs can vary widely though depending on location and experience.

Remember: the more that you and your ex partner can arrange together, the more money will end up in your own pockets, rather than lining someone else’s.

Obviously that is not always possible. In certain situations, for example, if you are separating from an abusive partner, you could get legal aid to help with court costs.

Find out more about what costs you are likely to face when getting a divorce and how to cut them down.

How long does a divorce financial settlement take?

How quickly you can get the settlement sorted depends on:

• The relationship between you and your ex
• How complicated your financial affairs are

If you can’t come to an arrangement, you may have to ask the court to decide on how your financial affairs should be split.

A judge will usually try to sort out a “clean break”, sharing everything out, severing all financial ties to each another.

You will probably have to attend court a number of times for hearings. So the process may take much longer than if you had come to an amicable agreement. 

Who gets my share of the property if I divorce?

During a divorce financial settlement, the matrimonial home is often treated differently from your other matrimonial assets.

Even if just one of you contributed, the starting point is that the home and assets are divided equally between you. Further division is usually dictated by individual financial needs and your standard of living.

A court will take into account how long you were married or in a civil partnership for and whether there are any children. The longer the marriage, the more likely the court will want to divide the matrimonial property equally.

What is a Declaration of Trust?

A Declaration of Trust – also referred to as a Deed of Trust – is a legal document you can sign when you buy a property:

• Often used when a number of people have a stake in a property, for example, if you have the help of the Bank of Mum and Dad to buy
• Records the financial arrangements of everyone with an interest in the property
• Sets out what share each person owns and what will happen to that share if, say, everyone agrees to sell or one owner wishes to buy another out

A court will usually only go against a Declaration of Trust if it is required to meet the needs of the financially weaker party who may, for example, have little earning capacity.

TIP: You might want to consider taking wealth protection advice in relation to a post-nuptial agreement to protect your share of the property.

Can an ex husband, wife or civil partner claim for property after a divorce?

Even after the divorce has been finalised, there is a chance that a former partner can make a claim because a divorce does not cut the economic ties between two people.

Therefore one partner can try to claim ownership over their ex’s property, even after the decree absolute has been granted and there is no time limit on this.

To stop this you need to get a financial consent order. This is a document used by the courts to divide money and any assets during a divorce legally and finally. If you are unsure speak to a family lawyer or you can get advice from Citizen’s Advice.

How to protect your pension during divorce

Your pension should be included in your financial settlement if you divorce or end your civil partnership. It should be confirmed through a court order.

There are several ways to deal with pension arrangements when you divorce:

• You are given a percentage share of your former partner’s pension pot, known as pension sharing.
• Some of your pension is paid to your former partner. This is known as pension attachment or pension earmarking and is a bit like a maintenance payment directly from one person’s pension pot.
• The value of a pension is offset against other assets. This is known as pension offsetting and is a way to protect your pension. For example: you keep your pension and your former spouse or civil partner keeps the home.

How do we separate our finances in a divorce?

If your finances are linked in some way contact your bank, building society or other lender as soon as possible. Until you do this, both of you can withdraw money as you wish, and both are liable for the entire debt (not half each).

Ask your bank to alter the way your joint bank account is set up, so that both of you have to agree to the withdrawal of any money or to freezing or unfreezing the account.

Make sure that you won’t need access to that money, as an uncooperative partner may refuse to unfreeze it. If shutting an account seems the best option it may be worth doing that if you are able to, however:

• Both of you need to agree to this
• You will have to pay off any debt owing

Holders of credit cards and store cards who have their partner named as a second card holder, be warned: you are responsible for all their spending on it.

Contact your credit card company but don’t leave them without access to money if this is what they use for everyday spending. It is in no one’s interest to make the divorce more acrimonious that it needs to be.

Does getting a divorce cut my financial ties with my ex?

No, financial association continues even after separation or divorce. That’s unless you request a notice of disassociation from the credit reference agencies.

Being financially associated with someone, as is likely to be the case when you are married or in a civil partnership, will show up on your credit report.

This includes:

• Taking out a mortgage or any other credit together such as a loan or joint credit card accounts
• Opening joint accounts

You need to apply for a notice of disassociation after the matrimonial assets have been split and transferred into sole names. This will break any link between your credit and your former partner’s.

Without a disassociation, any debt racked up on joint bank accounts or credit cards – or if your ex doesn’t pay bills that they should – could still impact on your credit rating. This in turn could affect what lenders are willing to offer you in the future. Read more about the dark side of joint finances here.