When a relationship breaks down and divorce becomes the only option moving forward, it can be hard to sit down and fully consider every issue related to your joint finances and assets yourself. Especially if there are children involved that you have to care for too.

What am I Entitled to in a Divorce Settlement ?

What you are entitled to in your divorce settlement is dependent on your individual circumstances.  

Normally it is the matrimonial assets that are up for debate in divorce settlements.

Matrimonial assets are assets that were acquired by either party while married or with income earned while married. 

Generally, the two largest matrimonial assets are the family home and either party’s pension. Also included is:

• Other real estate properties.
• Savings accounts and banked cash.
• Vehicles.
• Stocks and investments.
• Businesses.

Anything that you or your partner owned before marriage (or after if it were purchased using non-matrimonial funds) is considered non-matrimonial.

Typically, non-matrimonial assets will be excluded in a divorce settlement. This is unless the matrimonial assets do not add up to a sufficient provision for either party or the non-matrimonial assets were brought into and used during the marriage.

If you are wondering what is considered personal property in a divorce in the UK, this is legally referred to as chattels. Chattels include any personal possessions that are not classed as matrimonial assets, financial assets, or real estate.

While you may feel a sentimental attachment to some form of chattel, if the property was bought during the marriage or with matrimonial funds then it is up for debate as to who will be granted possession of the item.

How are Assets Split in a Divorce in the UK?

In the UK, divorce settlements typically aim to achieve a 50/50 split for both parties. 

However, this split is often not met due to other circumstances that arise, meaning that one party receives a larger portion of the matrimonial assets than the other.

Courts must consider several factors included in the Matrimonial Causes Act 1973 and the Civil Partnership Act 2004 when dividing assets in a divorce in the UK.  

This includes the income and financial needs of each party as well as the family’s standard of living before the marriage began to collapse.

In terms of income, if either party has a high earning potential for the foreseeable future, then this will be accounted for. Property and other financial assets are also included.

The income is then considered against the financial responsibilities that each party has or will have in the future, and the contributions that have already been made to the welfare of the marriage or contributions that will need to be continued.

Finally, if the conduct of either party to the marriage was so severe that it would be unfair to disregard it then this will be taken into account. This will be for very severe cases, for example domestic abuse with long term lasting effects.

In the case of adultery, the innocent party may expect to receive a larger financial settlement (usually as a result of resentment towards the adulterer) but this is not the case. The court will not take adultery into account, and if this ends up going to court then all it will do is make the process more expensive for both parties.

According to the court, each party to the marriage should try to be as self-reliant as possible with their income. When this is not possible due to healthcare, childcare, or other financial responsibilities that limit their earning capacity, there will be court intervention by way of splitting assets or settlement/maintenance payments.

Do I Need to Go to Court to Decide on a Financial Settlement?

No, if you and your former spouse can agree on a financial settlement that suits both of you then this is perfectly acceptable.

However, it is advised that you discuss with your lawyer about what settlement plan you and your former spouse are proposing because you may not be fully aware of the value of some of your joint assets like pensions.

If you choose not go to court for a financial order then your former spouse could potentially file a financial claim at any point in the future provided that you have not remarried. 

Also, be aware that this settlement will not be legally binding and your former spouse could change the terms of their agreement at any point. To prevent this, you should have the court approve your agreement through a consent order.

A consent order legally binds your financial settlement and can be drafted by your solicitor on your behalf. You and your partner will have to sign the document and send it into the court along with the court fee of £50.

If you are not dividing assets between you and you both want to walk away from the marriage as is then a clean break order will suffice. This will provide you with protection from your former spouse seeking a financial settlement years after you divorce, as you may have heard of happening from a number of high-profile cases in the media.

Fair Divorce Settlement Examples UK

We will list a couple of examples of simple divorce settlements below to highlight how a ‘fair’ divorce is a spectrum influenced by the personal circumstances of both parties.  

Example one: John and Jenny.

John and Jenny have been married for 11 years. They have no children, and have had similar incomes with a comparable trajectory for their earning potential since they got married and are still in the same job roles.

Jenny files for a divorce because John has committed adultery, which John does not contest.

Despite the adultery offence, a fair divorce settlement in this instance would be a 50/50 split of all matrimonial assets with no spousal maintenance or investigation into non-matrimonial assets.

Example two: Stewart and Ruby.

Stewart and Ruby have been married for 17 years. They have two children, and Ruby stopped working to look after them. Stewart supports the family with his income.

A fair divorce settlement may be reached in this case by allowing Rose to keep the family home where she will raise the children. Stewart will have to pay child maintenance and spousal maintenance for a set period of time.

Example three: James and Grace.

James and Grace were only married for 2 years and did not live together before their marriage. They have no children.

The fairest divorce settlement in this instance may be for each party to walk away with what they brought into the marriage, with no entitlement to the other’s possessions, pensions, or other assets.

Example four: Frank and Emily.

Frank and Emily have been married for 12 years. They have no children, and Emily earns more than Frank with a likelihood that her income will keep on increasing over the next few years.

A fair divorce settlement in this case may mean that Frank receives a larger share of the matrimonial assets, with Emma not being required to pay spousal maintenance.