Family finances on divorce: what can the court order?

Divorce (or the dissolution of a civil partnership) does not automatically divide assets. The division of finances requires a separate application to the family court — a financial remedy application — unless the parties reach a binding agreement approved by the court. Without a court order, a former spouse can bring financial claims many years after divorce. This article explains what the court can order and the principles it applies. For the step-by-step application process, see the divorce financial order guide.

The legal framework

The court's powers to make financial orders on divorce come from ss.23–25 of the Matrimonial Causes Act 1973 (MCA 1973). The court has very wide discretion — there are no fixed rules. Instead, s.25 of the MCA 1973 sets out a list of factors to which the court must have regard, including: the income, earning capacity, property, and financial resources of each party (now and in the foreseeable future); financial needs, obligations, and responsibilities; the standard of living during the marriage; the age of each party and the duration of the marriage; disability; contributions (both financial and non-financial, including caring for children); and conduct (in exceptional cases). The welfare of any children of the family is the court's "first consideration" — not its only consideration, but its paramount starting point.

Types of order: lump sum, property adjustment, periodical payments

Lump sum order: a one-off payment from one party to the other. Property adjustment order: transfers the legal ownership of a property (or a share of it) from one party to the other, or orders sale and division of proceeds. Most commonly used for the family home. Periodical payments order (maintenance): ongoing monthly or annual payments by one party to the other. Spousal maintenance ends automatically on the payee's remarriage and can be varied or discharged on a material change in circumstances. The trend in English law is towards "clean break" orders that end financial ties on divorce rather than long-term maintenance. Pension sharing order: divides pension benefits between the parties, with each receiving a share of the pension fund that is then independently managed — see the settlement glossary entry.

The "sharing" and "needs" principles

English courts approach financial remedy by identifying the assets, then applying two main principles. The sharing principle — drawn from the landmark House of Lords decision in White v White [2000] UKHL 54 — holds that the fruits of the matrimonial partnership should be divided equally as a starting point. The needs principle modifies equality where one party has greater needs (typically because they are the primary carer of children, or have lower earning capacity) — needs may justify departure from equality in favour of the more vulnerable party. Short marriages with no children often produce a more limited award; long marriages with children often produce equality or better for the primary carer.

Reaching agreement without a contested hearing: consent orders

Most financial remedy cases settle by agreement — either through solicitor negotiations, mediation, or collaborative law. Any agreement must be approved by the court as a "consent order" to become binding and to achieve a clean break. An unapproved agreement is not enforceable as a financial remedy order. When submitting a consent order, both parties must file a Form D81 (statement of information) disclosing their financial positions so the court can assess whether the order is fair. For the consent order process, see the divorce financial order guide and the cohabitation rights guide (for unmarried couples, different rules apply).

When mediation can help

Couples who disagree about the division of finances should explore mediation before a contested hearing — a contested financial remedy case can cost tens of thousands of pounds in legal fees and take two or more years. Mediation is often funded partly by the Family Mediation Voucher Scheme. See the MIAM and family mediation guide and the mediation or court article.