The introduction of no-fault divorce in April 2022 has made this process relatively smoother for many separating couples. However, settling finances is still a necessary part of divorce in the UK. Therefore, this article provides essential information on divorce financial settlement in the UK to help you learn what you may or may not be entitled to. While this resource may offer a preliminary understanding of the subject, it’s still in your best interest to discuss these details with your solicitor to make decisions that will safeguard your future.

Divorce Financial Settlement in the UK

Financial settlement is the legally-binding agreement with your former spouse about how your assets and finances are distributed between the two of you post-divorce. Of course, before the legal document is drafted, you and your spouse must be in agreement with the terms of the settlement.

What You May Be Entitled To

It’s important to understand that no party is guaranteed specific finances and assets as per law. Thus, what you may be entitled to will depend on your unique case. That said, there are specific types of assets considered in a financial settlement, and they are listed below.

  • Money, which includes investments and savings
  • Property, which includes individually-owned property and family homes
  • Vehicles
  • Business shares
  • Life insurance
  • Pension
  • Child financial support, Spousal Maintenance support, and other types of financial support payments

In your divorce financial settlement, you can also make a claim on your former spouse’s future earnings, i.e., after the divorce. This feature is applicable in England and Wales but not in Scotland.

Matrimonial and Non-Matrimonial Assets

Matrimonial and non-matrimonial assets are critical factors when determining divorce financial settlement in the UK. The former are those assets procured after the marriage took place, while non-matrimonial assets are those that each spouse had before they were married.

That said, the relevant difference between these two types of assets is that non-matrimonial ones are protected by pre-nuptial agreements.

Factors That the Court Considers

The courts are determined to acquire a fair divorce financial settlement for both parties involved. Therefore, it considers the following factors when determining if the finances and assets are correctly allocated. This list is not exhaustive, however.

  • Each spouse’s debt
  • Which parent will look after the child or children for the majority of their childhood (if there are children involved)
  • The length of the marriage
  • The ages of the spouses
  • Earning capacity of each party
  • Financial and emotional contribution to the marriage
  • The couple’s standard of living before the divorce
  • Each spouse’s individual assets

Last Few Words

You will need an experienced and capable solicitor if you want a fair divorce settlement in the UK. They can help explain your unique condition to the court so that the outcome is not favourable to just one party involved in the marriage.