Divorce Financial Settlement - Who Get's What?

If you are separating from your spouse, one of the biggest questions you may have is who gets what in a divorce financial settlement. Many people assume there is a simple answer, but the way finances are dealt with will depend on the circumstances of the marriage and the needs of each person, as well as any children involved. 

Divorce and the division of finances affect a significant number of families each year. According to the Office for National Statistics, 102,678 divorces were granted in England and Wales in 2023. 

The starting point in many cases is often described as 50/50. However, this does not mean every divorce financial settlement will end with assets being divided equally. The court has a wide discretion and will look at a number of factors before deciding what is fair. 

Understanding how a divorce financial settlement works can help you approach negotiations with greater clarity, especially where there are pensions, property, savings, family gifts or inherited wealth to consider. 

What is a Divorce Financial Settlement? 

A divorce financial settlement is the arrangement reached between separating spouses about how their finances will be dealt with after the marriage ends. This may include the family home, savings, pensions, income, debts, business interests and other assets. 

It is important to understand that divorce and finances are separate legal issues. A final order legally ends the marriage, but it does not automatically resolve financial claims between spouses. This means that even if you have agreed how assets should be divided, it is usually advisable to have that agreement recorded properly. 

The number of people seeking formal financial arrangements is substantial. Ministry of Justice data shows that 47,507 financial-remedy cases were started in England and Wales during 2025. These cases cover applications for financial provision following divorce or relationship breakdown. 

A divorce financial settlement can be reached by agreement, through solicitors, mediation or, where necessary, by asking the court to decide. 

Is Everything Split 50/50 in a Divorce Financial Settlement? 

The usual starting point is equal sharing, particularly in a longer marriage where finances have become intermingled over time. This is because the court recognises both financial and non-financial contributions to the marriage.  

For example, one spouse may have earned more money, while the other may have taken on more responsibility for raising children or managing the home. Domestic contributions are still treated as valuable contributions. 

However, a divorce financial settlement does not always result in a 50/50 division. The court’s main focus is fairness, and that can mean moving away from equality where one person has greater needs, a lower earning capacity or primary care of the children. 

What Factors Does the Court Consider When Dividing Assets in Divorce?  

When dividing assets in divorce, the court looks at the factors set out under Section 25 of the Matrimonial Causes Act. These help the court decide what outcome is fair.  

The factors include: 

• The income, earning capacity and financial resources of each person 
• The financial needs of each person, including housing needs 
• The standard of living enjoyed during the marriage 
• The age of each person and the length of the marriage 
• Any physical or mental disability 
• Contributions made to the marriage, including domestic contributions 
• The conduct of the parties, in limited circumstances 
• Any benefits either person may lose because of the divorce, such as pension benefits 

Before considering these factors in detail, the court’s first consideration is the welfare of any children. Where one parent has the main care of the children, this may affect the overall division of assets. 

Can a Divorce Settlement Calculator Tell Me What I Will Receive? 

Many people search for a divorce settlement calculator because they want a quick answer about what they may be entitled to. However, a divorce settlement calculator can only ever give a very broad indication.  

A calculator cannot properly assess the needs of each person, the housing requirements of any children, the value of pensions, the length of the marriage or whether certain assets should be treated differently. 

A divorce settlement calculator may be useful as a starting point, but it should not be relied on as legal advice.  

Why Pensions Matter in a Divorce Financial Settlement 

Pensions are one of the most commonly overlooked assets in divorce. Many people focus on the family home or money in the bank because those assets are easier to see and understand. However, in some cases, a pension can be worth as much as, or even more than, the family home. 

A pension may not feel immediately important because it may not be accessed until retirement. However, ignoring pensions can create serious financial problems later in life, particularly if one spouse has built up a much larger pension during the marriage. 

A fair divorce financial settlement should consider pension provision alongside property, savings and income. This can help make sure both people have financial security not only now, but also in the future. 

What is a Divorce Settlement Agreement? 

A divorce settlement agreement is an agreement between spouses about how their financial arrangements will be resolved. This may cover property, savings, pensions, debts, maintenance and any other financial matters. 

However, simply agreeing between yourselves is not always enough. To make the agreement legally binding, it will usually need to be set out in a financial order and approved by the court. 

What Happens to Inherited Wealth and Family Gifts? 

Inherited wealth and family gifts may be treated differently from other assets. These are often referred to as non-matrimonial assets, particularly where they have been kept separate from the marriage. 

For example, if one person receives inheritance and keeps it in a separate bank account, does not use it towards the family home and does not use it for family expenses, it may be easier to argue that it should be ring-fenced. 

However, if inherited money or family gifts have been used for the benefit of the family, such as buying or improving the family home, the position may become more complicated. The asset may become ‘matrimonialised’, meaning it is treated as part of the wider matrimonial finances. 

When dividing assets in divorce, the source of an asset can be relevant, but it is not the only factor. The court will still consider overall fairness and the financial needs of both parties. 

Financial Settlement After UK Divorce Time Limit 

A common question is whether there is a financial settlement after the UK divorce time limit. In many cases, financial claims between spouses are not automatically dismissed just because the divorce has been finalised. 

This means that if there is no financial order in place, one person may still be able to bring a financial claim in the future. This can come as a surprise to people who assume the final order has ended everything between them. 

If you are concerned about the financial settlement after the UK divorce time limit, it is sensible to seek legal advice as early as possible. A properly drafted financial order can help provide certainty and reduce the risk of future claims. 

Frequently Asked Questions About Divorce Financial Settlements 

Do I Need a Financial Settlement If We Have No Assets? 

It may still be advisable to obtain a financial order, even where there are currently few assets to divide. A divorce ends the marriage but does not necessarily dismiss future financial claims between former spouses. A solicitor can advise whether a clean break order or another form of financial order is appropriate.  

Can My Ex Make a Financial Claim After the Divorce? 

Potentially, yes. Finalising the divorce does not automatically end financial claims. Unless those claims have been formally dealt with through a court-approved financial order, a former spouse may still be able to make a claim later. 

What Is a Clean Break Order?  

A clean break order is a type of financial order that dismisses some or all future financial claims between former spouses. Whether a clean break is appropriate will depend on matters such as income, pensions, property, ongoing maintenance and the needs of any children. 

Does Adultery Affect a Divorce Financial Settlement?  

Adultery will not normally determine how assets are divided. The court focuses on the financial circumstances and needs of each person, along with the statutory factors in Section 25 of the Matrimonial Causes Act 1973. Conduct is generally considered only in limited and exceptional circumstances.  

Can We Agree a Divorce Financial Settlement Without Going to Court? 

Yes. Couples can reach an agreement directly, through solicitors or through mediation. However, the agreement will normally need to be incorporated into a financial order and approved by the court before it becomes legally binding. 

How Can Smith Partnership Help You? 

A divorce financial settlement can have a significant impact on your future, so it is important to understand your rights before making any decisions. 

Our family law solicitors can advise you on a divorce settlement agreement, pensions, inherited wealth, property, financial disclosure and the process of dividing assets in divorce. We can also help you understand whether a proposed agreement is fair and how to make it legally binding. 

If you need advice about a divorce financial settlement, a divorce settlement calculator, or the financial settlement after the UK divorce time limit, contact our team by telephone on 0116 247 2000, complete our online contact form, or send us an email via info@smithpartnership.co.uk.