A lady signing a financial settlement document

Whether you have been married for one year or twenty, you and your partner have made financial commitments to one another. When you choose to end the relationship through divorce, these financial commitments must be reviewed and managed correctly.

When arranged effectively, this can be an amicable process, with both parties walking away with a fair share of their joint estate, ready to start the next chapter in their lives. But what exactly is involved in reaching a financial settlement?

What is a financial settlement?

A financial settlement is a step in the divorce process or civil partnership dissolution. It’s when you and your ex-partner discuss and agree on how your money, assets and financial responsibility will be split between you. The intention is to ensure a fair division of assets post-divorce, with reassurance that both parties and any dependents can comfortably move on with their lives.

A solicitor showing a couple their financial settlement

How can we reach a financial divorce settlement?

There are a few ways to work through your financial settlement, each with pros and cons depending on your situation.

Mutual Agreement

Whilst the preferred solution for many and can save time, money and hostility it is important any agreements reached directly are made in the full knowledge of your respective financial positions and with equal positions of power in those discussions. Mutual agreement involves both parties working together to discuss how their financial assets and responsibilities will be shared after separation.

Professional Mediation

Although parties may want a direct agreement, sometimes emotions can get the better of them, especially in sensitive situations such as divorce. Mediation encourages an open conversation with both parties alongside a neutral trained mediator to help you work through your particular circumstances and come to an agreement.


For more complicated situations or where you struggle to agree between you a solicitor can act for you to assist you in reaching a settlement. This could be by undertaking constructive negotiations in correspondence, round table meetings, hybrid mediation with solicitors present, collaborative law, Arbitration, private FDRs and early neutral evaluations. There are many options available to assist you in reaching a fair financial settlement and a specialist family solicitor can recommend the best route for your circumstances.

Court Intervention

Although court invention can be a time-consuming and costly process, it is sometimes essential when couples cannot reach an agreement and discussions are becoming unhealthy and other forms of negotiation or dispute resolution are no longer appropriate or suitable. The Court will manage the process and ultimately if agreement is not reached will decide the financial outcome for you.

Legally Binding

Whichever option you choose, a financial settlement should be made official and fully legally binding by way of an Order. A solicitor can draft your agreement into a legal document known as a Consent Order. Once approved by the Court this Consent Order will be final and ensure your agreed arrangements are protected.

A lady reading through her financial settlement agreement

How are assets affected in a divorce?

When considering how to divide assets the law has regard to Section 25 of Matrimonial Causes Act 1973. The first point of consideration is whether there are any dependent children and there are then a number of other factors which must be considered. The law has regard to your individual financial pot and the outcome will depend on your individual circumstances:

Current and future financial support and earning capacity

The income, earning capacity, property or other financial resources which either party has or is likely to have in the foreseeable future.

Needs and Responsibilities

The financial needs, obligations and responsibilities which each party has or is likely to have in the foreseeable future.

Current lifestyle

The standard of living enjoyed by the family before the breakdown of the marriage.

Health and wellbeing requirements

Any physical or mental disability of either party.

Age and marriage duration

Age of each party and length of the marriage/relationship.


The contributions made by each party to the marriage – this does not just mean financial contributions as contributions to the upbringing of children and running of household are just as important.

Party conduct

The conduct of each party involved is not relevant in the majority of cases.

There are no firm rules as to how assets are to be divided. Each case is different and decided on its own facts. The court has wide discretion to make various financial orders such as orders for the sale or transfer of property, lump sum orders and maintenance. The aim is to achieve a fair solution and assets owned jointly may be required to be divided unequally or those assets owned solely shared or transferred. The Court can block or enforce house sales and decide how equity should be split depending on the circumstances. You also need to consider pensions, assets and income. Often the key to settlement is the reasonable needs of both of you, and you will each need to carefully consider what those needs are and how they can be met fairly before entering into a settlement.

How long does a financial settlement take?

Timeframes for financial orders are determined by the complexity of each situation. For simple scenarios and with cooperative behaviour from both parties financial settlement can be concluded swiftly. If there are complications, or disagreements, or a Court application is required then the process can take as long as 9-18 months and in some limited cases, in particular with very complicated assets or positions, it can be longer still. Specialist advice will be able to assist you in reaching the quickest and fairest solution for your particular circumstances.

Disclaimer: Please note that this page is for guidance only and does not replace legal advice. It is correct with the law at the time of publication but please be aware that laws may change over time. This article contains general legal information but should not be relied upon as legal advice. Please seek professional legal advice about your specific situation – contact us for dedicated help for you.

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