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The four financial considerations to make when applying for divorce

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There have been so many consequences of Covid-19 on our personal lives, our working lives, our economy and of course our health, with the impact likely to stay with us for many years, especially for those who have also seen their relationship break down during the pandemic.  Unfortunately, divorce rates have increased over the last 12 months, and if you find yourself in this situation there will many factors to consider; one of which will be your finances.  According to the Office of National Statistics, only 3% of people seek financial advice when applying for divorce.  Robyn Finnegan, Family Law Solicitor, explains here why it is so important to seek this specialist advice when separating, reviewing the four key considerations.

Why should I obtain financial advice when divorcing?

When we think about divorce, we immediately consider the emotional impact this will have on us and those in our family, particularly our children.  This is only natural; however it is crucial to consider the financial implications as the decisions made during the divorce will stay with you.

You may be tempted to agree to suggestions your former spouse makes in order to keep things amicable, especially if children are involved.  Having the right advice will ensure you are aware of everything you may be entitled to, the rights you may be waiving and will facilitate negotiations, keeping any hostility and the risk of disputes arising to a minimum. 

Before making any decisions, you should consider not only your immediate future and how you will financially survive, but also the long-term future.  Depending on the nature of your separation and the assets you hold either separately or jointly there will be in-depth financial disclosures to be made which will need thorough analysis and review.  Only once this disclosure has been assessed can proposals be made as to whether a 50/50 split would be adequate or whether an unequal division is required.  Having a Solicitor who can do this on your behalf allows an accurate assessment to be made as to your financial rights, and will also relieve the burden from your shoulders at a time when you will be making many different arrangements. 

There are four key areas to consider in your financial disclosure:

  1. Children

Arrangements for your children will be the first consideration when deciding on any financial arrangement.  Financial decisions will be based on your children in several ways:

  • Where the children will be living and with whom.  If they will live mainly with one parent, while the other parent has contact, the living costs will need to be supplied and any child maintenance that will be paid. 
  • Any impact the children may have on the working abilities and therefore the income for the parent they will live with.
  • The living standards of your children, for example, whether they go to private school will need to be factored into your discussions. 
  1. Property

This will include any property you own jointly or separately, including the family home and any other property.  You will need to disclose any information about your current living situation and your future requirements, which will need to include decisions about the properties, for example, whether you will be staying there with any children, buying out your former spouse or selling the property and look to split the proceeds.

  1. Money

A full financial disclosure will include monetary details including the following:

  • Joint and sole bank accounts.
  • Any savings or investments either of you have accrued.
  • Day to day living expenses and your current standard of living.
  • Your current income but also your earning capacity in the future.
  • Any business assets.
  • Loans and credit cards.
  1. Pensions

Pensions can be an incredibly valuable asset to divide in a divorce, and one that can lead to disputes as invariably one party will have more in a pension than the other.  Parties will want to either secure their own pension or ensure they are supported later in life now that they will not be married and no longer be spending their retirement together. 

There are three main ways to separate a pension in divorce proceedings:

  • Pension offsetting – one spouse’s pension is traded off against the other’s assets, which can create a problem if there are not enough assets on the other party's side to equal the value of the pension.
  • Pension earmarking – a percentage will be agreed upon and when the pension becomes accessible at the appropriate retirement age, the pension will be split as agreed.  In this situation, the pension holder still controls the pension, when it is paid out and what investments may be made.
  • Pension sharing – the pension is split from the date of divorce, allowing each person to access the pension as and when they choose.

While pension sharing is normally the most compatible option as it offers a cleaner split at the time when a couple if divorcing, this will very much depend on your own situation, and so we can advise accordingly. 

Calculating how the pension will be divided offers another set of challenges as this will be governed by the type of pension you have, for example if you have a defined benefit pension, otherwise known as a final salary pension.  An experienced Solicitor with financial knowledge will be able to advise you on obtaining an accurate valuation of the pension and arrange an actuary to provide an expert report on the best outcome for you.

How could Family Mediation help me if we can’t reach agreement on our finances?

Making such important decisions will not always be easy, and it’s plausible that agreements may not be reached when presented with the facts.  If this is the case, Family Mediation can assist without the need to go to Court for a Judge to rule over the decisions, which can be timely, costly and inevitably leave you out of control of the outcome. 

Family Mediation provides an opportunity for you and your former spouse to meet in a neutral environment where both of you can discuss your points of view regarding your finances or arrangements for your children.  The Mediator will ensure both of you are heard and offer different perspectives for you both to consider with the aim to come to a joint decision you are both happy with.  The Mediator will not take sides, will not allow one party to dominate the discussions and will not attempt for you to reconcile; that is not the aim of Mediation. 

What legal documents can help secure my financial future following divorce?

Once agreement has been reached, we would strongly recommend that this is legally recorded in the form of a consent order.  No-one knows what the future holds and not having a legal document in place could leave you open to claims against you in the future.  Reaching a legally binding agreement will separate your finances leaving you ready and able to move forward in your new life.

Robyn concludes, “Every situation will be different and determined by the circumstances leading to your separation.  While it is not a legal requirement to have a solicitor for these discussions, we would always recommend you seek legal advice before starting your divorce application or agreeing to any financial arrangements.  If your case ends up in Court, the Judge will take many different factors into account when deciding, such as the length of the marriage, your age and health, and we can provide you with the right advice, support and knowledge to take every possible element into consideration, leaving you with the best financial outcome for your future.”

To discuss your situation with Robyn or a member of the team, call us today on 023 8071 7431 or email


This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.