Divorce financial settlements: What you need to know

When going through a divorce, one of the most critical issues couples face is navigating divorce financial settlements. Understanding your legal rights and responsibilities during this process is essential for achieving a fair result. If you need expert legal guidance, our Family Law Solicitors at Fosters can help you navigate the complexities of financial arrangements during divorce.

Sorting out divorce financial settlements can be challenging, especially with additional issues such as spousal maintenance, clean break order, and the division of assets. In England and Wales, the law seeks to ensure that financial settlements are fair to both parties and any children involved, but each case depends on its unique circumstances. This article explains the key aspects of financial settlements, including what the law says, how the courts approach division, and the steps you can take to secure your financial future after divorce.

Understanding divorce financial settlements

Divorce financial settlements refer to the division of finances and assets following the breakdown of a marriage. This can include property, savings, pensions, and debts, as well as arrangements for spousal maintenance. The aim is to reach a fair agreement that meets both parties’ needs, particularly where children are involved.

The legal framework for divorce financial settlements in England and Wales

The law on divorce financial settlements in England and Wales is governed by the Matrimonial Causes Act 1973. The court considers a range of factors when deciding what is fair, including:

• The welfare of any children.
• The income, earning capacity, property, and other financial resources each party has or is likely to have in the foreseeable future.
• The financial needs, obligations, and responsibilities of each party.
• The standard of living enjoyed by the family before the marriage breakdown.
• The age of each party and the duration of the marriage.
• Physical or mental disabilities.
• The contributions made by each party, both financial and non-financial.
• The conduct of each party, if it would be unfair to disregard it.

For more detail on these factors, visit the official guidance from GOV.UK.

Key elements of divorce financial settlements

• Division of assets: Assets such as the family home, savings, investments, and pensions must be considered and valued. The starting point is often a 50/50 split, but the court may adjust this based on needs and contributions.
• Spousal maintenance: Payments may be made by one spouse to the other to meet ongoing needs, either for a limited period or for life, depending on circumstances.
• Clean break order: A clean break order is a financial order that completely ends the financial relationship between former spouses, preventing any future claims.

It is essential to understand each of these elements to ensure a comprehensive settlement.

How to reach a divorce financial settlement

1. Disclosure: Both parties must fully disclose their financial circumstances, including income, assets, debts, and pensions.
2. Negotiation: Couples are encouraged to agree on a financial settlement between themselves or through solicitors or mediators.
3. Consent Order: Once an agreement is reached, it should be made legally binding with a consent order approved by the court.
4. Court proceedings: If no agreement is reached, either party can apply to the court for a financial order. The court will then decide how assets are divided.

Common challenges in divorce financial settlements

• Disagreements over asset values or hidden assets.
• Disputes regarding ongoing spousal maintenance.
• Complex finances, such as business interests or foreign assets.
• Uncertainty about future financial needs.

Having legal support can help address these issues and secure the best possible outcome.

Case scenario

Consider a married couple who have been together for 15 years, with two children and shared assets including a family home and pensions. When they decided to divorce, the main concerns were the division of assets and spousal maintenance. After full financial disclosure, mediation led to a settlement where the family home was sold, with proceeds split to provide both parties with housing. A clean break order was obtained, ensuring neither could make future financial claims. This allowed both parties to move on with financial security.

Expert insights on divorce financial settlements

Legal professionals in England and Wales recommend:

• Obtaining early legal advice to understand your rights and options.
• Prioritising full financial disclosure to avoid complications or legal challenges.
• Considering a clean break order where possible to achieve finality.
• Ensuring any agreement is formalised by a consent order to make it enforceable.
• Taking pensions into account, as these can be a substantial part of the settlement.

Our team of expert Family Law Solicitors can help you understand and support you through the entire process of divorce – and aim to provide you with clear, sound and practical advice.

Whether you wish to begin the application yourself, or you are the respondent to the application, we aim to provide our clients with tailored and comprehensive advice. Our family divorce solicitors are able to advise you on the most suitable way forward, taking into account your particular circumstances.

Contact us for more information.

Benefits and challenges of divorce financial settlements

Frequently asked questions about divorce financial settlements

What is a divorce financial settlement?

A divorce financial settlement is the legal process of dividing finances, property, and assets between spouses following a divorce in England and Wales. It ensures both parties’ needs are met and often includes spousal maintenance, a clean break order, and the division of assets.

What factors do courts consider in divorce financial settlements?

Court decisions on divorce financial settlements consider factors such as the welfare of children, earning capacity, age, duration of marriage, contributions made, and each party’s financial needs.

How is the division of assets decided?

The division of assets in divorce financial settlements typically starts with a 50/50 split but can be adjusted depending on the needs and contributions of both parties. Assets considered include the family home, savings, investments, and pensions.

What is a clean break order?

A clean break order is a legal order that ends all future financial claims between former spouses following a divorce, providing certainty and closure.

What is spousal maintenance?

Spousal maintenance refers to ongoing financial support paid by one spouse to the other after a divorce. The court decides the amount and duration based on each party’s financial needs and circumstances.

How can I make a divorce financial settlement legally binding?

To make a divorce financial settlement legally binding in England and Wales, you must obtain a consent order approved by the court. This formalises the agreement and ensures enforceability.

Table: Key terms in divorce financial settlements

Numbered steps for a divorce financial settlement

1. Full financial disclosure by both parties.
2. Negotiation to reach an agreement.
3. Preparation of a consent order.
4. Court approval of the consent order.
5. Implementation of the settlement.

This article was produced on the 12th September 2025 for information purposes only and should not be construed or relied upon as specific legal advice.