One of the most significant concerns for anyone going through a divorce is money — specifically, what they are entitled to and how the courts decide who gets what. The honest answer is that there is no automatic formula. Financial settlements on divorce are determined by reference to a set of statutory factors, and the outcome in any given case depends heavily on the specific circumstances of the marriage and the assets involved. This guide explains how the process works, what the courts consider, and what financial orders are available.
Our family law solicitors in Bolton advise clients on financial settlements at every stage — from initial advice on what to expect through to representing clients at a financial remedies hearing if an agreement cannot be reached.
Is There an Automatic 50/50 Split?
No. There is a common misconception that assets are automatically divided equally on divorce. While equality is a starting point in many cases — particularly long marriages where both parties have made broadly equal contributions — it is not a rule, and the court has a wide discretion to depart from an equal division where the circumstances justify it.
The starting point in English law is that the court should achieve a fair outcome. What is fair depends on the specific facts and is assessed by reference to the factors set out in section 25 of the Matrimonial Causes Act 1973.
What Does the Court Consider? The Section 25 Factors
When deciding how to divide assets on divorce, the court is required to consider all the circumstances of the case, with first consideration given to the welfare of any children of the marriage under the age of 18. Beyond this, the section 25 factors include:
Income, earning capacity, property and financial resources — what each party currently has and is likely to have in the foreseeable future, including earning potential.
Financial needs, obligations and responsibilities — what each party needs going forward, including housing needs, living expenses, and any responsibilities for children.
Standard of living during the marriage — the lifestyle enjoyed by the family during the marriage is relevant, though the court recognises that divorce inevitably reduces the overall standard of living for both parties.
Age of the parties and length of the marriage — shorter marriages may result in less interdependence of finances and a closer return to pre-marital positions. Longer marriages tend toward greater equality of outcome.
Physical or mental disability — where one party’s ability to earn or meet their own needs is affected by disability, this is a significant factor.
Contributions to the welfare of the family — both financial contributions and non-financial contributions (such as caring for children or managing the home) are relevant. Courts treat these as broadly equal in long marriages.
Conduct — in most cases conduct is not relevant. Courts do not punish one party for causing the breakdown of the marriage through adultery or other behaviour. Conduct is only relevant in exceptional cases where it would be inequitable to disregard it — for example, serious financial misconduct such as hiding assets.
Value of any benefit lost as a result of the divorce — this includes pension rights and other benefits that would have been enjoyed had the marriage continued.
What Assets Are Included in the Settlement?
The court has jurisdiction to make orders in respect of all matrimonial assets. In practice, the assets considered include:
- The family home — usually the most significant asset and often the primary concern, particularly where children are involved
- Savings and investments — bank accounts, ISAs, shares, and other investments held by either party
- Pensions — pension rights are frequently one of the largest assets in a divorce, particularly in longer marriages, and are subject to specific orders
- Business interests — where one or both parties own a business, its value will need to be assessed and considered
- Income — both current and future earning capacity
- Debts — mortgage liabilities, loans, and credit card debts are taken into account
Assets held by either party — whether in their sole name or jointly — are generally within scope. In shorter marriages, assets brought to the marriage by one party may be treated differently, though this depends on the circumstances.
What Financial Orders Can the Court Make?
Property Adjustment Orders
These deal with the family home and other property. The court can order that the family home be sold and the proceeds divided, that one party buy out the other’s interest, or that the property be transferred to one party — often where there are young children and the primary carer needs to remain in the home.
A Mesher order (delaying sale until children reach adulthood) or a Martin order (delaying sale for the life of the occupying party) may be made where an immediate sale would cause undue hardship.
Lump Sum Orders
The court can order one party to pay the other a specified lump sum — either in one payment or by instalments. This is commonly used to equalise the division of assets or to compensate one party for giving up their share of a specific asset.
Periodical Payments (Maintenance)
The court can order one party to make regular payments to the other — known as spousal maintenance — where one party has significantly greater income or earning capacity than the other and the lower-earning spouse needs support going forward. Maintenance can be for a fixed term or, in some cases, for life.
The court increasingly favours clean break orders — a single settlement that resolves all financial claims between the parties permanently, rather than ongoing maintenance. A clean break is generally preferred where both parties are able to support themselves financially after the settlement.
Pension Sharing Orders
Pensions cannot be divided in the same way as other assets — instead, the court can make a pension sharing order, which transfers a specified percentage of one party’s pension to the other’s pension fund. This is particularly important in longer marriages where one party has built up significant pension rights.
Alternatively, a pension offsetting approach can be taken — where the value of one party’s pension is offset against other assets, such as a larger share of the property for the other party.
Child Maintenance
Arrangements for child maintenance — regular payments to meet the costs of raising children — are typically dealt with separately from the overall financial settlement, either by agreement between the parties or through the Child Maintenance Service.
How Is a Financial Settlement Reached?
Most financial settlements are reached by agreement between the parties — either through direct negotiation between solicitors or through mediation. Once an agreement is reached, it should always be formalised by a court order — known as a consent order — to make it legally binding. An informal agreement, however detailed, is not legally enforceable without a court order.
Where an agreement cannot be reached, either party can apply to the court for a financial remedies hearing. This is a formal court process involving financial disclosure, a First Directions Appointment, a Financial Dispute Resolution hearing, and if still unresolved, a final hearing at which the judge makes a binding decision.
Our financial settlement solicitors advise on the most effective approach for your circumstances and represent clients at every stage of the financial remedies process.
How Hi Solicitors Can Help
Whether you are at the beginning of the divorce process and want to understand what a fair outcome might look like, or you are in dispute about finances and need representation at a financial remedies hearing, our solicitors in Bolton are here to help. We give clear, practical advice on realistic outcomes and work hard to achieve the best possible settlement for our clients.
Call 01204 371 414 for a free initial consultation with our divorce and financial settlement team.
187b Derby St, Bolton, BL3 6JT · hisolicitors.co.uk
Frequently Asked Questions
Q: Is everything split 50/50 in a divorce?
No — there is no automatic 50/50 rule. The court aims for a fair outcome based on the section 25 factors, with first consideration given to the welfare of any children. In long marriages where contributions have been broadly equal, equality of outcome is often the starting point — but the court has wide discretion to depart from this where circumstances justify it.
Q: Does it matter who caused the breakdown of the marriage?
In the vast majority of cases, no. Conduct — including adultery, unreasonable behaviour, or causing the relationship to break down — is not relevant to the financial settlement unless it is so extreme that it would be inequitable to disregard it. This is a very high bar and rarely met in practice.
Q: Are pensions included in a divorce settlement?
Yes. Pensions are frequently one of the most significant assets in a divorce, particularly in longer marriages. The court can make a pension sharing order transferring a specified percentage of one party’s pension to the other, or the pension value can be taken into account through offsetting against other assets. Pension sharing requires specialist actuarial advice and should always be dealt with carefully.
Q: Do I need a court order to formalise a financial agreement?
Yes — strongly advisable. An informal agreement between parties is not legally binding and either party can later make a financial claim against the other. A consent order approved by the court makes the agreement legally enforceable and provides a clean break from future financial claims. Always have any financial agreement documented as a court order.
Q: What is a clean break order?
A clean break order is a court order that permanently ends all financial claims between the parties — so neither can make financial claims against the other in the future. It is generally preferred by the courts where both parties are financially independent. It provides certainty and finality for both parties.
