Financial Settlement Guide
Everything you need to know about dividing assets on divorce — from the legal framework to consent orders, clean breaks, and pension sharing.
Speak to a SolicitorWhat is a Financial Settlement?
A financial settlement is a legally binding agreement that sets out how the matrimonial assets will be divided between divorcing spouses. It covers the family home, savings, investments, pensions, business interests, and any other assets or liabilities.
A financial settlement is not automatic — it must be agreed between the parties and approved by the court in the form of a consent order. Without a consent order, either party can make a financial claim against the other at any point in the future, even after remarriage.
How Courts Divide Assets
The court's starting point is an equal division of matrimonial assets, but it will depart from equality where the needs of one party — particularly housing and income needs — require it. The factors the court considers include:
Matrimonial assets
The family home, savings, investments, pensions, and business interests built up during the marriage.
Non-matrimonial assets
Assets owned before the marriage or received as gifts or inheritance — these may be ring-fenced in some cases.
Needs of each party
Housing needs, income needs, and the needs of any dependent children are the primary consideration.
Length of the marriage
Longer marriages generally result in a more equal division of assets.
Contributions
Both financial and non-financial contributions (such as childcare) are taken into account.
Standard of living
The standard of living enjoyed during the marriage is a relevant factor, particularly in high-asset cases.
Consent Orders and Clean Break Orders
A consent order is a court order that records the agreed financial settlement and makes it legally binding. A clean break order goes further — it severs all financial ties between the parties, preventing either from making future claims against the other's income or assets.
Not all divorces can achieve a clean break — where one party needs ongoing maintenance, a clean break may not be appropriate. Our solicitors will advise on the most suitable structure for your circumstances.