A divorce financial settlement is the legal process of separating assets, property, pensions, and finances after a divorce, dissolution of a civil partnership, annulment, or judicial separation. Without a court-approved financial settlement, your ex-partner could still make financial claims years after the divorce. A financial settlement order ensures your financial affairs are finalised and legally binding.
At Premium Solicitors, we are specialist divorce financial settlement solicitors offering clear, affordable fixed fee packages. Our expert team provides professional legal advice and representation in divorce and financial settlement matters, ensuring you know your costs upfront with no hidden surprises. If you are looking for experienced fixed fee divorce solicitors in London or Birmingham, our team is here to guide you through every stage of your financial settlement.
- Page Contents
- How Can Finances Be Settled?
- What Does the Court Consider?
- How are Assets & Finances Split?
- How Much Do We Charge?
- Frequently Asked Questions
How Can Finances Be Settled?
Financial settlements can be achieved in two main ways:
By Consent Order: An agreement reached between both parties (often through mediation or negotiation), submitted to the court to be legally approved.
By Financial Settlement Order: If no agreement is reached, the court decides how assets will be divided after reviewing financial disclosure and evidence.
What Does the Court Consider in a Financial Settlement?
When deciding how assets and finances are divided, the court will look at:
- The financial needs of both parties
- The needs and welfare of any children
- Length of marriage or civil partnership
- Current and future earning capacity
- Health and age of both parties
- Assets, pensions, businesses, property (UK and overseas)
- Standard of living during the marriage
- Contributions to the marriage (financial and non-financial)
How Are Finances and Assets Split?
The judge has the final decision on how your assets will be split. The key factors which will be taken into account in an assessment of how any capital should be divided, as well as whether or not income should be shared, are as follows:
- Children – their financial needs as well as other factors that may affect their future well-being;
- The financial needs of you and your spouse;
- The length of the marriage or civil partnership and your respective ages;
- The current earnings of each party and the potential earning capacity of each party now and in the future;
- Health issues affecting either you, your spouse or any children;
- The assets of each party, including pensions;
- The standard of living you have had during the marriage or civil partnership;
- The financial and non-financial contributions (such as caring for children and running the house) that each of you has made to the marriage or civil partnership;
- It is only in very exceptional circumstances that your conduct and/or that of your spouse / civil partner is relevant when dealing with financial matters.
The judge is only likely to consider a 50/50 split if you have been married or in a civil partnership for a long time. The main consideration is the needs of those involved, including children. If, after consideration, the judge thinks that one of you has a greater need than the other, the assets can be split unequally.
If, for example, two young people divorce after a brief, childless marriage, it might be fair for them to each walk away with the assets they brought into the marriage, with neither paying the other maintenance.
On the other hand, suppose a couple have been married for 30 years, with the wife bringing up the children and looking after the home while the husband worked. A fair financial settlement might award the wife half the joint assets, including half her husband's pension entitlement and a significant proportion of her husband's income until he retires. This would reflect the value of the wife's contribution to the marriage as a homemaker and the fact that she would not now be in a position to suddenly start earning a large income.
If there are children, their needs - including maintenance - are dealt with separately as a priority.
Matrimonial Home and Financial Settlement
The family home will almost always be an asset of the marriage and will therefore be included in the financial negotiations. Divorce settlement negotiations start from the point of a broad equality in division of assets. If one spouse wishes to retain the family home, they will need to have enough other assets to be able to offset the value of their spouse’s share of the home by transferring assets of that value to their spouse. If not enough assets are available to achieve this, then the family home may have to be sold so that the equity contained within it can be split.
In some situations, particularly if there are children, it can be possible to be more creative, for example, one spouse could stay in the family home with the children, and the spouse leaving the home could retain a defined financial interest in the property, which they will realise at an agreed future date.
Pension and Financial Settlement
Your pension is a marital asset, like your home and other assets. The value of your pension can be taken into account in deciding a fair settlement. Practical solutions can include:
• offsetting the value of one spouse's pension fund by transferring a lump sum, or other assets, to the other spouse;
• splitting the pension fund into two separate pension funds, one for each spouse;
• arranging that when a pension comes to be paid, a proportion of it is paid to the other spouse.
Business Assets and Financial Settlement
A family business is often looked at as something which produces an income - that can be used to provide maintenance - rather than just as an asset to be shared or sold. There is no presumption that the individual who has built up the business has a greater claim to the business assets. The other partner's contribution to the marriage, for example, by looking after the home and children, might be considered to be equally large. Depending on the circumstances, this might mean that each partner could claim entitlement to about half the value of the business.
In many circumstances, it is possible to agree on a settlement that allows the business to continue. For example:
• one partner could retain ownership of the business and pay maintenance out of the business income;
• the individual who will retain ownership of the business could borrow against the value of the business to provide a lump sum for the other partner;
• the business could be split into two separate businesses.
Where possible, courts try to avoid ordering a financial settlement that results in the break-up or liquidation of a business.
Overseas Assets and Financial Settlement
Assets held overseas can be taken into consideration in the same way as any other assets. In practice, a spouse may seek to hide overseas assets or transfer assets overseas to make them more difficult to recover. If you suspect that your spouse is doing this, take immediate legal advice.
Assets Held in Trust and Financial Settlement
Divorcing parties must disclose any trusts from which they benefit or expect to benefit, and the value of these benefits can be taken into account. There can be a grey area where the trustees of the trust have discretion over who will benefit.
If one of the spouses in a divorce has previously placed assets into a trust, these assets might also be taken into account. Clearly, this will be the case if the spouse who put the assets into trust is a beneficiary of the trust. It may also be possible to make a claim against the trust if it can be shown that the assets are still under the settlor's control or that the settlor created the trust once the marriage started to break down to shelter assets from a claim.
Trust law is complex. You should take advice if you wish to place assets into a trust or discuss what claim you might have against assets held in trust.
Life Insurance / Endowment Policies and Financial Settlement
Life insurance and endowment policies are taken into account when agreeing on a fair settlement. You should agree on how each policy will be handled, whether premiums will continue to be paid for regular contribution policies, and whether the beneficiaries of any life insurance cover will be changed.
You may choose to retain individual policies or to sell (or surrender) them. Any policies in joint names will normally be sold or transferred into one individual's name. Early surrender of a policy may result in a sharp fall in the expected value of the policy; any surrender, sale or transfer may also have tax consequences. Take advice on the best option in your circumstances.
Inheritance and Financial Settlement
A judge will not necessarily include an inheritance in your financial settlement, but will consider the needs of those involved. If you received your inheritance while you were married, the courts are more likely to include it as part of the settlement, but if it was received after your marriage broke down, they are more likely to exclude it.
Our Fixed Fees For Divorce Financial Settlement
Our fixed fees for divorce/dissolution of civil partnership/annulment and/or financial settlement matters are as given in the fee table below:
| Matter Type | Fixed Fee Range |
|
Preparation for mediation for financial settlement, mediation referral and follow-up advice |
From £500 + VAT to £800 + VAT |
| In case of agreement being reached in mediation, reviewing the agreement and advising on the same. Where acting for the petitioner, preparing and filing a consent order with the family court | From £800 + VAT to £1500 + VAT |
| All the work from issuing financial proceedings for financial settlement until the First Appointment Hearing | From £2,500 + VAT to £5,000 + VAT |
| All the work after the First Appointment Hearing until the First Dispute Resolution (FDR) Hearing | From £4,500 + VAT to £8,000 + VAT |
| All the work after the First Dispute Resolution (FDR) Hearing until the Final Hearing | From £6,000 + VAT to £12,000 + VAT |
| An application for permission for financial settlement in England and an overseas divorce or dissolution of civil partnership to cover all the work until the decision on the permission application by the court. | From £1,500 + VAT to £3,000 + VAT |
| Drafting and advising on a separation agreement after gathering all the relevant information from one of the parties | From £800 + VAT to £1500 + VAT |
| Giving legal advice on a separation agreement prepared by the other party after thoroughly reviewing the agreement | From £500 + VAT to £800 + VAT |
- We will provide a fixed fee for your matter once we have fully assessed it and considered all relevant factors.
- Our fixed fees do not cover any third-party fees, including court fees, Barrister's fees and any other fees payable to third parties.
- If you do not want to instruct us on a fixed fee basis, we can also act for you on an hourly rate basis with an hourly rate of £200 + VAT per hour, depending on the complexity of the matter.
FAQs - Divorce Financial Settlement
After the family court has issued a Conditional Divorce Order and after both parties have exhausted the mediation process (where applicable), an application for divorce financial settlement can be made to the court.
You can normally get a financial settlement any time during the divorce proceedings. However, you can apply for financial settlement even after the divorce has been finalised. It’s advisable to apply for financial settlement before your partner or you have remarried.
The court fee for filing divorce financial settlement application in the family court is £275 without consent and £53 with consent which has to be paid at the time of filing the application. Petitioners with very low income may qualify for court fee exemption.
The adjustment of assets/finances covered by the financial court order may include the following:
- property
- money
- shares
- savings
- pensions
- debts
- children/spousal maintenance
Normally, the behaviour of your spouse including adultery or unreasonable behaviour does not affect the divorce financial settlement. The grounds for divorce you use to obtain a divorce have no bearing on your financial settlement. Extreme behaviour may be taken into account by the court, for example, if one partner's violence has had a lasting effect on the other. If one partner recklessly or deliberately sabotages the financial position, for example, by spending recklessly or destroying assets, this could also be taken into account.
A clean break divorce financial settlement is where no ongoing financial commitments remain between you and your spouse. The phrase ‘a clean break’ is particularly used as the opposite of an order where there is ongoing spousal maintenance payable, usually monthly, from one spouse to the other.
A clean break is only possible in relation to the financial claims between spouses. It is not possible to have a clean break in relation to financial obligations towards your children.
In case you and your ex-partner have no assets to divide, you should also apply for a financial settlement. It’s important to do so, even if you don’t have any assets to divide at the time of the divorce. There’s no guarantee you won’t come into some money in the future and if you haven’t obtained a financial settlement, your ex is still within their legal rights to make a financial claim.
Once a 'clean break' agreement of this kind has been ratified by court order, neither of you will be able to go back to court in the future to ask for maintenance or further transfer of assets. This gives both partners a much greater degree of certainty and allows them to completely disentangle their individual financial affairs.
Not usually. It may be unwise to make excessively large payments to your spouse, because it might be argued that this shows both their need for such payments (or an equivalent transfer of assets) and your ability to pay.
Even so, any financial settlement should take into account the longer-term history of the marriage and future financial prospects.
On the other hand, if your spouse needs maintenance while you are separated, it would normally be sensible to provide it. Failure to do so is likely to make your spouse more hostile towards you.
Your spouse might apply to the court for an interim financial order requiring you to pay an appropriate level of maintenance. Both of these are likely to increase the overall level of ill feeling - and costs - in reaching a final agreement.
You will still have the same rights to occupy the home as you had before and can move back in if you choose.
There may be practical problems if, for example, your spouse changes the locks. While you will be entitled to get back in, it makes sense to ensure that you take anything you may need - such as important documents - with you in the first place.
There may also be other considerations so it is advisable to take advice before moving out.
If your spouse can make withdrawals from a joint account without your agreement, you run the risk that some or all of the money will be taken. You will also be jointly liable for any debts run up on the account.
If you need access to the money or if you suspect that your spouse may misuse it, you may want to close the account. The same applies to any other form of joint borrowing or spending facility, such as a joint credit card.
However, if you suddenly freeze accounts that your spouse needs for living expenses, this will create problems. Your spouse will want you to make appropriate maintenance payments and may apply to the court for an interim financial order.
If your spouse is the sole owner of the family home, you should apply to the Land Registry to register an interest in the property. This will prevent the house being sold without your consent.
If you remarry without having reached a financial settlement with your former spouse, you may lose the right to make any financial claim against your former spouse. He or she will still have the same right to make a financial claim against you as before.
If you have previously reached a clean break settlement, the remarriage (or cohabitation) will normally have no effect - you have already made a once and for all agreement.
If you are paying your former spouse maintenance (this does not include child maintenance), maintenance ceases if the recipient remarries (but not if the recipient merely starts to cohabit).
In any case, if your former spouse's financial position improves, you can apply to the court to stop paying maintenance or to pay a reduced amount.
If you are receiving maintenance from your former spouse, you should normally continue to do so after he or she remarries.
Obtaining a divorce typically takes about six months. The process can take longer if anyone fails to deal with the various pieces of paperwork promptly.
How long financial settlement takes depends very much on your relationship with your spouse and the complexity of your financial affairs. Often, the financial settlement can be negotiated over the same period as the divorce proceedings, and is then confirmed by a consent order.
Where there is an agreed financial outcome, it is possible to obtain a court order embodying the agreement (consent order) and your decree absolute within 6 months from start to finish.
Where an agreement is not reached, it could take between 12 – 18 months to conclude form the date an application for financial settlement is made to the court.
In most cases, both parties will have their own solicitor and will be responsible for their own legal fees. Only in unusual circumstances will the court consider conduct in the proceedings or the process of disclosure as a justification for an order for costs being made against the other party.
While negotiating a financial settlement you each use - and are responsible for paying - your own lawyer. As part of the settlement, however, one of you might negotiate that the other should pay part or all of their legal fees.
You can keep your legal fees down by agreeing as much as possible among yourselves. Fees can mount up if hostile spouses insist on conducting all negotiations through lawyers while arguing over trivial details.
The court has power to make orders for a spouse including:-
- Periodical payments (maintenance or alimony)
- Secured provision (maintenance that is charged against an asset)
- Lump sum (a cash payment)
- Transfer of property (where one legal ownership of an asset is taken away from one spouse and transferred to the other)
- (except upon decree of judicial separation) a pension attachment and a pension sharing order
- Agreed child maintenance orders, school fees orders and/or top up orders where there is a maximum Child Maintenance Service assessment.
Usually not unless you are about to receive the inheritance.
Prenuptial Agreements are not legally binding in the UK but are considered to be pursuasive for the judge to exercise discretion in deciding the financial settlement by giving weight to the pre nupital agreement. Pre-Nups, Post Nups and Pre-civil registration agreements cannot exclude the authority of the Court when dealing with financial issues when a marriage or civil partnership irretrievably breaks down. When divorce arises, the court has discretionary powers to distribute assets as the Judge sees is in the best interest of the parties/children/individual circumstances. The prenuptial agreement which has been entered into fairly and after taking appropriate legal advice may have persuasive authority for the judge to exercise discretion and give weight to the same in distribution of assets.
The caveat is that while UK courts will recognise prenuptial agreements, they also still have the ultimate discretion to ignore any agreement reached if the agreement is deemed to be unfair to any children of the marriage.
You can go to court to get the financial settlement altered.
You can go to court to ask them to change the maintenance order to reflect your circumstances. For example, you might do this if you lose your job and cannot find another one.
It is possible to reopen a divorce financial settlement, but extremely rare. In most circumstances, once a financial settlement has been officially recorded in the form of a consent order, the financial ties between the divorcing couple are broken and neither of them will be entitled to make financial claims in the future.
However, a precedent set during the case of Barder vs Barder (1987) means that a court may allow a financial settlement to be reopened if something later happens that alters the principle on which the original consent order was made.
Before the court will agree to reopen a settlement, four key factors need to be satisfied:
- A new event(s) occurs that invalidates the basis, or fundamental assumption, on which the original consent order was made.
- The new event(s) must have occurred within a relatively short time after the consent order was made.
- The request to re-open the financial settlement is made soon after the new event occurs.
- The appeal does not prejudice any rights to assets acquired by third parties (for example, if a house has been sold to an unconnected third party).
Successful applications to reopen financial settlements are rare but they do happen – for example, in the case of Critchell v Critchell (2015).
This will depend on many factors including:
- How long you were married
- The standard of living you enjoyed before the divorce
- Your respective financial needs and the financial needs of any dependent children
- The current earnings of each party
- The potential earning capacity of each party in the future
- The contribution made to the marriage, either financial or by caring for children and looking after the family home
For example, if a young couple with no children have been married for only a short time and both are working, then it may be fair for them both to leave the marriage with no ongoing financial ties and taking with them what they brought into the marriage.
If a couple have been married for 25 years and by agreement the wife gave up a career to bring up the family at home, while the husband became the sole bread winner, then the wife's future earnings capability may be severely compromised.
In these circumstances the wife should not be penalised for her lack of earnings ability and may be entitled to ongoing spousal maintenance.
When a marriage or civil partnership ends, courts deal with the pension arrangements in one of 3 ways.
- You’re given a percentage share of your former partner’s pension pot. This is known as pension sharing. The money that you get from the pension pot of your former spouse or civil partner is then legally treated as your money.
- The value of a pension is offset against other assets. This is known as pension offsetting. For example: you keep your pension and your former spouse or civil partner keeps the home.
- Some of your pension is paid to your former partner. This is known as pension attachment or sometimes pension earmarking. This is like a maintenance payment directly from one person’s pension pot to their former spouse or civil partner. Under this arrangement, money from your tax-free lump sum can also go to your former spouse or civil partner.
