The starting point is equality. But in practice, courts weigh a range of factors, and the outcome depends heavily on the specific facts of your marriage.
No two financial settlements on divorce are the same. The law gives the court wide discretion, deliberately so, because the financial arrangements that work for one separating couple may be entirely inappropriate for another. What the law does provide is a framework of factors the court is required to consider. Understanding that framework helps separating couples and their solicitors predict the likely range of outcomes.
The Section 25 Factors
Section 25 of the Matrimonial Causes Act 1973 sets out the factors courts must consider when deciding how to divide the matrimonial assets. The first consideration is always the welfare of any children under 18. After that, the court weighs:
- ◆The income, earning capacity, property, and financial resources of each party
- ◆The financial needs, obligations, and responsibilities of each party
- ◆The standard of living enjoyed during the marriage
- ◆The age of each party and the length of the marriage
- ◆Any physical or mental disability of either party
- ◆Contributions made by each party, including non-financial contributions
- ◆Conduct of either party, where it would be inequitable to disregard it
- ◆The value of any benefit (such as a pension) that a party will lose on divorce
The Sharing Principle
In long marriages, the courts apply a sharing principle: marital assets (those generated during the marriage) are prima facie divided equally between the parties. This reflects the view that marriage is a partnership of equals and that both parties' contributions, whether financial or domestic, are of equal value.
Pre-marital assets, inheritances, and gifts from third parties occupy a more complex position. They are not automatically excluded from the matrimonial pot, but they may be treated differently, particularly in shorter marriages or where the other party has not contributed to or benefited from them.
The Needs Principle
Where equal sharing would leave one party (typically the primary carer of children) unable to meet their housing and income needs, the court will depart from equality to meet those needs. The needs of the parties and any children take priority. Equal division is the starting point, not the destination.
Pensions: The Most Overlooked Asset
In many marriages lasting more than ten years, pension assets are the most valuable single asset, often exceeding the equity in the family home. They must be disclosed, professionally valued, and factored into any settlement. Do not agree to a settlement before pension assets have been properly addressed.
Conduct
Conduct is only relevant in financial proceedings in exceptional circumstances, specifically where it would be inequitable to disregard it. Adultery, for example, is almost never relevant to financial division in modern courts. The bar is high: concealing assets, making fraudulent transfers, or violence that has affected earning capacity are examples of conduct that may affect the outcome. General bad behaviour in the marriage does not.
Clean Break
Courts are required to consider whether it is appropriate to impose a clean break, ending financial obligations between the parties as soon as is just and reasonable. A clean break is generally achievable in shorter marriages without children, or where both parties have comparable earning capacities. Where there are children or a significant disparity in income, periodical payments (maintenance) may be necessary, though these can often be capitalised into a lump sum.
Why Early Advice Matters
The best financial settlements are negotiated, not imposed by a court. Litigation in financial remedy proceedings is expensive and unpredictable. Early advice from an experienced family solicitor allows you to understand the likely range of outcomes before you make any offer or concession, and to negotiate from a position of knowledge rather than assumption.