What Really Happens to the Family Finances During Divorce?

15 Oct 2025

When a couple separates, it’s often assumed that the finances will simply be split in half and that’s that. In reality, sorting out the financial side of divorce is rarely so clear-cut. It’s one of the areas that causes the most confusion and worry, yet it’s also where the right advice and planning can make a meaningful difference to long-term stability.

The first thing to understand is that divorce is a legal process, but the financial settlement is a separate one. It’s possible to get divorced without ever finalising a financial agreement, which can leave one or both parties exposed in the future. That’s why having a legally binding financial order is so important, even in seemingly amicable cases.

Clients often come in expecting a straight 50/50 split, but the law in England and Wales doesn’t demand equality, it requires fairness. What’s “fair” will depend on a range of factors: the length of the marriage, each person’s needs and earning capacity, their contributions (both financial and non-financial), and the welfare of any children involved.

For example, if one person gave up work to care for the children while the other progressed in their career, the settlement may recognise those differing roles and how they’ve affected each person’s future financial position. Fairness could mean an unequal division of assets to meet housing needs, or spousal maintenance to balance out income gaps. It’s not always intuitive.

Pensions are another area where people are often caught off guard. They can be one of the most valuable assets in a marriage, yet frequently they are overlooked or misunderstood. One spouse may have built up a substantial pension pot while the other has little or none, often due to career breaks or part-time work. In such cases, pension sharing can be a vital part of the settlement, but it requires specialist advice to assess properly.

Emotions understandably run high during divorce, and this can affect how people approach money decisions. It’s not unusual to see one person wanting to “just be done with it” and walk away without fully understanding the long-term implications, or another determined to hold on to the family home even if it strains their future finances. A key part of my role is to help clients step back, look at the bigger picture, and make informed choices that support their future wellbeing.

Working closely with family lawyers and mediators allows us to build a more joined-up approach, helping clients understand their options, avoid unnecessary conflict, and secure the clarity they need to move forward. There’s no one-size-fits-all answer when it comes to divorce finances, but with the right guidance, it is possible to achieve a settlement that feels fair and sustainable on both sides.