Divorce and Separation: The Financial Risks Couples Often Overlook

Relationship tensions can surface at any time, and for many couples, this is when problems can no longer be ignored. Financial pressures, childcare responsibilities, and the intensity of daily life can push some relationships to a breaking point.

When this happens, it can be difficult to know what to do next, particularly when children and family life are involved. Having the right support and guidance can make a real difference during an uncertain time.

Understanding the Stages of Relationship Breakdown

Relationship breakdown rarely happens in a single moment. More often, it unfolds gradually, whether a couple is quietly weighing up the idea of separation, navigating the practical steps of a split, or completing paperwork online. Today, ending a relationship is far more complex than it used to be.

While married couples are using the no-fault divorce process, an increasing number of long-term partners are separating without ever having been married.

Unfortunately, many underestimate how limited their legal rights are, which can lead to costly mistakes if they don’t seek specialist advice early.

No-Fault Divorce: What It Means for You

Since no-fault divorce was introduced in 2022, couples ending a marriage or civil partnership can apply jointly or individually without assigning blame. The process is designed to be straightforward, with clearer terms such as ‘final order’ replacing the older ‘decree absolute’.

However, this shift has created some confusion. Many people assume that a DIY no-fault divorce or obtaining a final order automatically resolves all financial arrangements. In reality, the final order only ends the marriage, and financial matters such as property, savings, and pensions must still be addressed separately, usually through a court-approved consent order.

Real-Life Risks of DIY Divorce

Family lawyers have reported cases where a spouse completed an online divorce, believing everything was settled, only to discover later that financial claims could still be made. For example, one spouse invested thousands in renovating the family home, only to find their ex could claim 50% of the increased value because no financial order had been made.

The case of Wyatt v Vince also serves as a cautionary tale. The Supreme Court allowed a former wife to claim a share of her ex-husband’s fortune more than 30 years after their divorce because no binding consent order had been made at the time.

Cohabitation and Separation: The Legal Gap

Alongside the classic marriage, cohabiting relationships are becoming increasingly common. According to the latest ONS data, cohabiting couples are the fastest-growing family type in the UK. Yet, the law has not kept pace.

Despite the myth of ‘common-law marriage,’ cohabiting partners do not enjoy the same legal rights as married couples. They have no automatic right to share assets, claim maintenance, or remain in the family home unless the property is legally held in their name.

This legal gap leaves many vulnerable, particularly partners who paused careers to raise children or contributed to household finances, assuming that a long-term relationship guarantees long-term security. While there have been calls for reform, no clear timetable has been set.

Expert Advice on Separation and Divorce

“Divorce and separation are happening against a completely different social backdrop,” says Sam Miles, family law specialist at Warner Goodman LLP. “No-fault divorce has made the process less confrontational, but not necessarily clearer. More couples are living together without understanding how little legal protection they have. Early legal advice prevents small misunderstandings from becoming major financial or emotional problems.”

For divorcing couples, this advice includes:

• Understanding when to apply for the final order
• Knowing when to pause the divorce process
• Protecting property, pensions, and savings through a binding financial consent order

For cohabiting couples, it may involve:

• Creating a declaration of trust
• Preparing a cohabitation agreement
• Knowing legal options if separation is already underway

“For anyone considering divorce or separation, the message is simple: do not let emotion overwhelm your outcome by rushing into action without proper advice,” Sam added.

Get in touch

If you're going through a divorce, separation or facing difficulties with cohabitation, we're here to help.

Our experienced Family Law team understands how difficult these situations can be and is here to offer clear advice, reassurance and practical support to help you move forward with confidence.

To speak to our team in confidence, call us on 023 8063 9311 or email enquiries@warnergoodman.co.uk.