What Am I Entitled to in a Divorce Settlement UK?

Often our clients will ask “what am I entitled to in a divorce settlement”. It is an understandable question as your financial security after your divorce is crucial. The first step is understanding your entitlements under UK divorce law and what is considered a fair outcome. Here we look at what is considered in a financial settlement and how assets are treated.

All financial aspects of a couple’s life together are included in a divorce settlement. This will normally cover a wide range of assets and income sources. It may include the family home and any other properties you own. It can also include savings and investments, business assets, pensions, and personal belongings, such as cars or jewellery. Your debts and liabilities are also included, alongside income and earning potential. The aim of the settlement is to achieve fairness. This involves making sure that you and your ex, and any dependent children, are provided for as fairly as possible.

A 50/50 split is often the starting point in divorce negotiations, but it is not always the outcome. As the court’s focus is fairness, it will look at the individual circumstances of the marriage. This will include the length of the marriage, each of your financial and non-financial contributions, your housing needs, and the needs of any children.

Assets are valued at the time of the divorce, not when they were acquired. Assets that will need to be valued include your property valuations (family home and any investment properties), your pensions, investments and business valuations (if applicable). You will both need to full and frank financial disclosure of your assets and your bank account balances.

Normally all assets are considered matrimonial assets unless it is proven otherwise. Some assets, such as those acquired before the marriage, gifts and inheritances, may be treated as non-matrimonial. However, even non-matrimonial assets may be considered if needed to meet the needs of either party or their children.

The family home is often the most valuable asset. Whether you can keep it depends on your circumstances and needs, especially if children are involved. Options include one party buying out the other’s share, selling the home and splitting the proceeds, deferred sale (Mesher order), particularly when children still live in the home. Ultimately, the court will seek to ensure both parties and any children are adequately housed.

Pensions can be a significant part of many divorce settlements and should not be overlooked. Pensions can be dealt with in one of three main ways: Pension sharing – the pension is divided at the time of divorce. Pension offsetting – one party retains the pension, while the other receives other assets of equivalent value. Pension attachment – one party receives a percentage of the other’s pension income (less commonly used today). It is essential to obtain expert financial advice, especially if pensions are complex or of high value.

If you or your ex owns a business, it will be considered in the settlement negotiations. It will need to be valued, often by a forensic accountant. That being said, the court is generally reluctant to order the sale of a business if it provides a source of income. Instead, they will often look for ways to preserve it while achieving fairness in the division of assets.

Inherited assets are typically regarded as non-matrimonial property, especially if received before the marriage or kept separate during it. However, if the inherited money or property has been used for the benefit of the family, for example, to buy the family home, it may be considered a matrimonial asset. Even untouched inheritances can be included in settlements if needed to meet basic needs.

Spousal maintenance may be awarded where if there is disparity in income or earning potential, and one party is financially dependent on the other. Spousal maintenance can be for a fixed term or until the recipient of the maintenance remarries. It will be based on need of the recipient and the paying party’s ability to pay it. Courts will also consider whether the lower-earning spouse can become financially independent over time.

What you are entitled to in your divorce settlement will depends on a wide range of factors. The length of your marriage, your financial needs, your contributions, and the welfare of any children, will all be considered. Each case is different and these is not a one-size-fits-all solution. To make sure you receive a fair settlement, it is important to speak a family law solicitor who can guide you through the process and advocate for your best interests.

As leading family law solicitors in Milton Keynes our team of specialists can advise and guide you from the moment we start working with you. In addition to our head office in Milton Keynes, we also have offices in Bicester, Watford, and London where we can arrange appointments to see you in person. Talk to us in confidence and find out where you stand. Get in touch – we’re here to help.

This article is intended for the use of our clients and other interested parties. The information contained in it reflects the author’s view and is believed to be correct at the date of publication. However, it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional legal advice.