Sorting out your finances

Why you must sort your finances

Your divorce does not automatically divide your money and property. If you complete your divorce without a financial order, either of you can make a claim against the other at any point in the future. This is not theoretical. It happens.

The only way to draw a line under your finances is with a court-approved order. If you agree on everything, this is called a consent order - A legal document that turns an agreement between you and the other party into a court order. Once approved by a judge, it’s legally binding and enforceable. and costs £60 to file. If you cannot agree, you apply for a financial remedy order - The legal process for dividing money, property, pensions, and other assets after divorce. Also called financial proceedings or ancillary relief., which costs £313 and involves court hearings.

What the court considers

The court looks at your whole picture. There is no fixed formula and no automatic 50/50 split. The starting point for a long marriage is equal sharing of matrimonial assets - Property, money, pensions, or other assets acquired during the marriage. The starting point is that these are shared equally, though the court can adjust this based on needs. (things acquired during the marriage), but the court adjusts this based on needs.

The factors the court considers include: both parties' income and earning capacity, the property and financial resources each person has, the financial needs of each person (including housing), the standard of living during the marriage, the ages of both parties, any physical or mental disability, the contributions each person made to the family (including looking after the home and children, which counts equally to earning money), and the welfare of any children under 18.

Children's needs come first. This means the parent who has the children most of the time often gets a larger share, because the children need to be housed.

Things to consider before you decide

Some people going through divorce make quick decisions about money before understanding the full picture. This is completely understandable. Divorce is exhausting and emotional, and sometimes it feels easier to just walk away or agree to whatever is suggested. But a decision made in the heat of the moment is not the same as a decision made with all the information in front of you.

You do not have to claim anything. You do not have to fight for anything. But you deserve to know what the landscape looks like before you decide.

If you are thinking “I will just let them have everything,” that is your right. But consider this first. Contributions to a marriage are not just financial. If you looked after the home, raised the children, or supported your partner's career, the court considers that an equal contribution to earning money. A deposit paid by a family member may or may not be treated as a shared asset, depending on the circumstances. Pensions built up during the marriage are matrimonial assets, even if only one of you was paying in. Debts in joint names remain joint until formally separated, regardless of who spent the money.

The same applies if you are thinking “I do not deserve anything” or “I do not want to be difficult.” Knowing what you are entitled to is not the same as demanding it. It is making sure that whatever you agree is a choice, not an accident.

Your property

Property in one name does not mean one person's property in a divorce. The court can transfer, sell, or divide property regardless of whose name is on the deeds. What matters is the needs of both parties and any children.

If the property is in your ex's name alone, you still have matrimonial home rights. You can register a Home Rights Notice - The form used to register a Home Rights Notice at the Land Registry. Free to file. Prevents a property being sold or remortgaged without the other spouse knowing. Essential if the property is in one name only. using form HR1 at the Land Registry, completely free. This prevents the property being sold or remortgaged without your knowledge. Do this before anything else if the property is in your ex's name alone.

Read our full guide to what happens to the home →

Your options

1. Agree between yourselves and get a consent order

This is the cheapest and quickest option. You work out what is fair between you, then get the agreement turned into a consent order and filed with the court for £60. You can draft it yourselves, use an online service, or have a solicitor - A lawyer who manages your case day to day, handles paperwork, gives legal advice, and instructs a barrister when needed. Unlike barristers, solicitors deal with you directly and handle the ongoing relationship. prepare it.

2. Use a mediator to help you reach agreement

A mediator is a neutral third party who helps you both find common ground. They do not take sides. Mediation - A process where an independent person helps you and the other party reach agreement without going to court. It’s voluntary, and anything said in mediation is confidential. typically costs £500 to £2,000 total for both parties, and most cases settle within 3 to 5 sessions. Once you reach agreement, you still need a consent order to make it binding.

3. Apply to court for a financial remedy order

If you cannot agree, you apply to the court. This costs £313 and involves up to three hearings. The court will look at both your finances and make a binding decision.

Read our guide to financial remedy proceedings →

Pensions

Pensions are often the second-biggest asset after the home, and people forget about them. They can be shared (a percentage transferred from one pension to the other), offset (one person keeps the pension, the other gets more of other assets), or attached (payments made from one person's pension to the other when they retire).

You do not need to know the exact value right now, but you should request a Cash Equivalent Transfer Value - Cash Equivalent Transfer Value. The cash value of a pension if it were transferred to another pension scheme. Used to compare and value pensions during financial proceedings. Free to request from your pension provider. (CETV) from each pension provider. This is the cash value of a pension if it were transferred to another scheme, and it is what the court uses to compare pensions. Requesting a CETV takes several weeks, so start early.