Financial Settlements Explained

When a marriage ends, agreeing on a financial settlement is just as important as finalising the divorce itself. Without one, you risk ongoing disputes, unexpected claims years later, and uncertainty about your financial future. In this guide, we’ll explain why financial settlements matter, what happens if you don’t have one, and how a solicitor can protect your interests.

What Is a Financial Settlement in Divorce?

A financial settlement is the legal agreement that sets out how assets, debts, pensions, and ongoing financial support will be divided when a marriage ends. It can cover:

– Property (including the family home and any second properties).

– Savings, investments, and business interests.

– Pensions.

– Debts and liabilities.

– Spousal maintenance.

– Business shares/assets.

In England and Wales, the court has wide discretion under Section 25 of the Matrimonial Causes Act 1973 to decide what’s fair, based on factors like income, needs, standard of living, and childcare responsibilities.

Divorce Without a Financial Settlement: The Hidden Risks

Many couples mistakenly believe that once the divorce is finalised, financial ties are automatically severed. This is not the case. Without a formal settlement approved by the court:

– Future claims remain possible — even years after the divorce.

– One party could claim against assets you acquire later, such as an inheritance or business profits.

– Disputes over pensions, property, or maintenance can resurface.

Why a Solicitor Is Important for Financial Settlements

While it’s possible to reach an agreement without legal help, a divorce financial settlement solicitor ensures:

– Full financial disclosure from both parties.

– A fair division of assets based on your needs and rights.

– Protection against unfair terms or hidden liabilities.

– The agreement is legally binding through a consent order.

– Without legal advice, you risk agreeing to terms that are unenforceable or financially damaging in the long term.

Learn more on What is a Financial Order in Divorce?

How Are Assets Divided in a Financial Settlement?

The starting point is often a 50/50 split of marital assets, but the court will adjust this based on:

– The needs of any children under 18.
– Each party’s earning capacity.
– Housing needs.
– Contributions to the marriage (including non-financial contributions like childcare).
– Health and age of each party.

Pensions in Divorce: Why They Matter

Pensions are often one of the largest assets in a marriage, yet they’re frequently overlooked. Options include:

– Pension sharing orders — splitting the pension between both parties

– Pension offsetting — one party keeps the pension, the other receives assets of equivalent value

– Pension attachment orders — a portion of the pension income is paid to the other party

Failing to address pensions can leave one spouse financially vulnerable in retirement.

Learn more on Pensions and Divorce

Clean Break Orders: Securing Your Financial Independence

A clean break order ensures that neither party can make future financial claims against the other. This is particularly important if:

– You have no ongoing maintenance obligations.

– You want certainty and closure.

– You’re planning to remarry or acquire significant assets.

Learn more on What is a Financial Order in Divorce?

Top Tips for Achieving a Fair Financial Settlement

– Seek early legal advice — even before starting divorce proceedings.

– Be transparent — full disclosure avoids delays and disputes.

– Consider mediation — it can be faster and less costly than court.

– Think long-term — consider pensions, future earnings, and potential life changes.

– Formalise the agreement — only a court-approved order is legally binding.

How to reach a Financial Settlement

A divorce without a financial settlement leaves the door open to future disputes and claims. By working with an experienced solicitor, you can secure a fair, legally binding agreement that protects your assets and gives you peace of mind.

To reach a financial divorce settlement agreement in the UK, both parties must give full and honest financial disclosure of all assets, debts, and pensions, then negotiate terms directly, through mediation, or via solicitors.

Once agreed, the terms should be formalised in a court‑approved Consent Order to make them legally binding and prevent future claims. If agreement isn’t possible, the court can decide through a Financial Remedy Order, considering factors like needs, income, and children’s welfare.

Where possible, a Clean Break Order can end all future financial ties, and getting expert legal advice ensures the settlement is fair, enforceable, and protects your long‑term interests.

If you’re going through a divorce or separation, our specialist family law solicitors can guide you through the process and ensure your financial future is secure.

Frequently Asked Questions About Financial Settlements in Divorce

How long after divorce can you claim a financial settlement in the UK?

There is no fixed statutory time limit to apply for a financial settlement after divorce in England and Wales. However, until a court issues a final financial order, either party can make a claim — even years later. This means your ex could potentially seek a share of assets you acquire in the future. The safest approach is to finalise a settlement during the divorce process to avoid uncertainty.

Can you get a clean break without going to court?

Yes — if both parties agree on the terms, you can achieve a clean break through a solicitor-led negotiation, then submit a consent order to the court for approval. This avoids a contested court hearing while still making the agreement legally binding. Without court approval, your agreement won’t prevent future claims.

Learn more on What is a Financial Order in Divorce?

Do I need a solicitor for a clean break order?

You’re not legally required to use a solicitor, but it’s strongly recommended. A solicitor ensures the order is drafted correctly, covers all assets (including pensions), and is enforceable. DIY orders risk rejection by the court or leaving you exposed to future claims.

What happens if I don’t get a financial settlement?

Without a settlement, your financial ties remain open indefinitely. Your ex could claim against:

– Property you buy after divorce

– Inheritances

– Business profits

– Lottery winnings (yes, it’s happened)

A court-approved settlement — ideally with a clean break clause — closes the door to future claims.

Our family law solicitors can help with divorce proceedings, children matters and financial settlements and financial orders. They can support you through the entire process, and even help if you have dealt with a divorce yourself and are looking for support through the financial settlement or child custody stages.

The family law team also offer a free legal consultation to new clients. You can book an appointment by telephone, video call or in person.

Request a call back below or call us on 0114 2235 807 to book your free consultation today.