Financial arrangements

One of the most challenging aspects of divorce and separation is reaching an agreement about financial arrangements. At Davisons, we can help you agree on dividing your assets and managing your finances. We will offer you all the guidance you need to plan a secure future for you and your family.

What are financial arrangements?

When a marriage or civil partnership ends, agreeing on the finances is a separate part of the process. However, both the divorce and finances are usually managed at the same time. 

A financial arrangement can include how properties, savings, investments and pensions will be divided between the parties. As part of the arrangement, it may be the case that one party may receive a share of the other party’s pension. It is also possible for maintenance payments to be agreed upon to assist with living expenses and caring for the children. Financial arrangements would be specific to your family and your family’s situation. 

How are financial assets calculated?


The first step to calculating assets is for both parties to disclose their finances openly and honestly. This is called ‘financial disclosure’. It is crucial for both parties to provide full and frank disclosure for any negotiations to be effective. If your ex-partner refuses to disclose their finances or you believe they are hiding assets, you can obtain a court order which would order your ex-partner to disclose their financial information.

Financial disclosure includes:

  • Property valuations
  • Mortgage statements
  • Savings and investments
  • Bank statements
  • Business accounts
  • Credit card bills
  • Loan statements
  • Insurance policies
  • Pension valuations
  • Wage slips and P60s

What does the court take into consideration when dividing assets?


The Matrimonial Causes Act 1973 gives the court a set of criteria to apply when deciding how assets should be divided. The first and paramount concern of the court would be any children under the age of 18 (The welfare of the children and the family). The court would want to ensure the children are housed suitably and, therefore, the party with whom the children live with. The following criteria are then considered by the court when deciding a financial arrangement:

  • The family’s standard of living
  • The income, property and earning capacity of each party
  • The financial needs and responsibilities of each party
  • The length of the marriage
  • Disabilities of each party
  • The contribution each party has made to maintaining the family home and caring for children
  • Any serious disadvantage that either party will suffer due to the end of the marriage
  • The conduct of each party, but only if it is so severe, it must be taken into account

The court will aim to divide assets as fairly as possible, which may not mean an equal division down the middle.

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What type of financial orders can the court make? 

There are several different types of financial orders a court can make. 

Periodical payments orders

There are two types of periodical payments orders:  

  • Spousal Periodical Payments
    This is when the financially stronger party pays maintenance to support the day-to-day living expenses of the other party. This can be set for a specific period of time, and it will usually end when or if the receiving party remarries.
  • Child Periodical Payments
    The parent with whom the child does not live with contributes towards the child’s daily living costs. Typically child maintenance is organised through the Child Maintenance Service, and it is only when payments are higher than the Child Maintenance Service would calculate that the court makes this type of order.

Lump sum orders

The court orders one party to make a lump sum payment to the other. This may be as payment for their share of the family home. 

Property adjustment orders

The court may make an order for the sale or transfer of a property. This is not usually the family home.

Pension orders

This order sets out how one party would share a pension with the other. Pension schemes only allow pensions to be divided or transferred when a court order has been granted.



How long can it take to get a financial order? 

When parties cannot reach an agreement, a court application is issued to obtain a financial order. These proceedings can take approximately 12 months to conclude. This, of course, will depend on the complexity of the case and also the court timetabling. It is quicker and more cost-effective to reach an agreement with your ex-partner without requesting the court’s assistance on the matter. 

At Davisons, we can help you reach a financial settlement with your ex-partner outside of court by negotiating with their solicitor or supporting you through mediation. Most cases are settled without going through the court process.

If you reach a financial arrangement with your ex-partner outside court, it is advisable to turn your agreement into a legally binding Consent Order. This will protect you against any future financial claims against you that your ex-partner could bring. In England and Wales, there is no time limit for an ex-spouse to make a claim, even after you are both divorced. So even if you do not have any assets now, it is wise to protect yourself if your situation changes in the future.

Should you require a financial order from the court, interim maintenance payments can be arranged. These are temporary payments that one party pays to the other to help them meet immediate day-to-day expenses. These payments will cease once the court order takes effect. Where parties cannot agree on interim maintenance payments, an application can be made to the court.





Do you need support with financial arrangements? 

You may be worried about what will happen to your home and how sorting out your finances following your separation may affect your life and your children’s lives. You may also be wondering how to divide joint assets such as savings or shares. Whatever situation you face, we have the knowledge and expertise to find the best solutions for you. We will do everything possible to help you settle your financial arrangements as quickly and cost effectively as possible.




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Financial arrangements FAQs

Will I have to attend mediation?

If you and your partner reach an agreement in relation to the finances following your separation, you will not need to attend mediation. If you are unable to reach an agreement, it is advisable to attend mediation in the hope that matters can be resolved without the Court’s assistance. Should you wish to issue financial remedy proceedings, it is now a requirement for parties to have attended mediation unless they are exempt from attending.

If my ex-partner and I have reached an agreement, do we have to have this recorded in a legal document?

If you and your ex-partner have reached an agreement in relation to the finances and do not record this in a consent order or a separation agreement, there is no guarantee that your ex-partner will honour your agreement. We would therefore advise for parties to enter into a Consent Order which would record all the agreements made between you and your ex-partner and also advise for you both to have a clean break should this be suitable. A clean break would simply mean that you both were enabled to make claims against each other in future. If young children are involved, an immediate clean break may not be ordered by the court.

If divorce proceedings are not being issued but you wish to record your agreement, you may wish to consider a separation agreement. Even though a separation agreement in not legally binding, if it has been correctly drafted, it is more likely that a Judge will uphold it in Court should one party refuse to keep to the terms agreed.

What will the Court consider when deciding upon my case for a financial order?

There are specific principles which the Court must consider and these are set out within s.25 of Matrimonial Causes Act 1973.

The Court’s first and paramount concern is of any children of the family who have not yet reached the age of 18. The Court would want to ensure that the children are suitably housed and therefore the parent with full time care of the children has necessary housing requirement.

The Court would then take into account the following factors:

  • The income, property and earning capacity of each party.
  • The financial needs responsibilities of each party.
  • The standard of living enjoyed by the family.
  • The age of each party to the marriage and the duration of the marriage.
  • Any mental or physical disability of either of the parties of the marriage.
  • The contributions that each party has made or is likely to make in the future to the welfare of the family.
  • Any serious disadvantage that either party may have suffered as a result of the end of the marriage.
  • The conduct of each party.

How many hearings will I have to attend?

If your matter proceeds to Court, the first hearing which will be listed will be a First Directions Appointment (FDA). At this hearing, the Judge will determine whether the parties have all the necessary financial information that they will need in order to begin negotiations. Should any information be outstanding, the Court will make an order for the same to be provided by the parties.

The second hearing would be a Financial Dispute Resolution (FDR) hearing. This hearing is listed to assist the parties to settle their matter. It is usually advisable to attempt to settle your matter at this hearing given that the next and final hearing would be where the Court will be making the decision on the parties’ behalf. At this hearing the Court will give an indication as to whether the parties will need to adjust their positions in terms of negotiations in the hope that the parties will take the advice and reach an agreement.

At the Final Hearing, the Court will hear evidence from you and your ex-partner and thereafter make a financial order which the Judge would believe is suitable for the parties.

At FDA or FDR hearings, sometimes it is not possible for these hearings to be effective due to information not being available to the Court or the parties. At other times, there may not be a Judge available for the hearing. It is therefore necessary to adjourn hearings and to have them relisted.

In other matters, there maybe individuals who have an interest in assets that belong to the parties and therefore they intervene into the proceedings to protect their interest. It is likely for the Court to list a further hearing to hear this application.

It is usually hoped that matters settle before the Final Hearing and parties are encouraged to do the same.

My ex-partner has issued Court proceedings. Do I need Solicitors?

It is advisable for any party to receive legal advice at the earliest stage of their separation. We would advise that it is necessary to instruct solicitors especially when proceedings are issued as there are various directions which need to be complied with. Your Solicitors will ensure that these directions are complied with and on time avoiding any cost orders being made against you.

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