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When a marriage ends, one of the most important legal issues is how you and your former spouse will divide your money, property and financial responsibilities. In England and Wales, this is dealt with through a financial settlement, which can take place alongside or after your divorce. The aim is to reach a fair and lasting resolution that reflects your circumstances, needs and any children’s requirements.

A financial settlement looks at all of the couple’s shared financial interests. This usually includes:

• The family home and other property – deciding whether to sell, transfer ownership to one party, or defer sale until a later point.
   
• Savings, investments and bank accounts – dividing monetary assets and accounts.
   
• Pensions – pensions are often one of the largest assets and need careful treatment. They can be shared, offset or transferred under a pension sharing order.
   
• Business interests and other valuable assets – including shares or commercial property.
   
• Debts – shared debts such as joint loans or overdrafts must also be considered and allocated fairly.
   

These assets are known as matrimonial assets, meaning they were acquired during the marriage. “Non-matrimonial” assets — such as inherited property or money brought into the marriage — may be treated differently, depending on how they have been used. 

There is no automatic formula for dividing finances. Instead, the court considers what is fair in all the circumstances. Key factors include:

• Each person’s financial needs – including housing, income and day-to-day living costs.
   
• Children’s needs – ensuring that any children affected continue to have a secure and stable standard of living.
   
• Duration of the marriage and each partner’s contributions.
   
• Earning capacity and future prospects for both parties.
   

The court may start from an assumption of sharing assets fairly, but that doesn’t always mean an equal 50:50 split — fairness will depend on the specific circumstances. 

Most separating couples aim to reach an agreement without going to court. Common approaches include:

• Negotiation between solicitors – where lawyers work together to find a practical outcome.
   
• Mediation – an independent mediator helps both parties discuss and agree terms.
   
• Collaborative law – each partner commits to finding agreement outside court.
   

Once you and your ex-partner agree, your solicitor can prepare a Consent Order. This is submitted to the court for approval and, once sealed, becomes legally binding.

In addition to dividing assets, financial arrangements may include:

• Spousal maintenance – regular payments from one former partner to the other to assist with ongoing living costs, where appropriate.
   
• Child maintenance – financial support for the children, which can be agreed privately or calculated through the Child Maintenance Service.
   

Because financial settlements are complex and affect your future security, obtaining legal advice early is crucial. A solicitor can help you:

• understand what you are entitled to
   
• identify all assets and liabilities
   
• explore tax and pension implications
   
• prepare court applications if needed
   

A well-structured financial settlement brings certainty and closure, letting you move forward without ongoing financial ties.