Breaking up is hard to do- Your finances on divorce

Managing your money | Pensions

3rd January 2017

It’s a sad fact of life that long periods of time spent with their other halves over the festive season can prove to be the final straw for many married couples.

When divorcing, couples are encouraged to come to an amicable arrangement of their finances through mediation. Whilst there are no hard and fast rules about how their assets should be divided, the broad starting point is a 50:50 split. If the couple can’t agree, then the court will be left to decide how things should be apportioned between them taking into account factors such as their age, earning ability, the property and money they brought to the marriage, and their role and relationship within the marriage. Above all, the court looks to ensure that the needs of any children involved are fully considered.


The property can be sold and the proceeds divided, or one spouse can buy out the other’s share. If there are children involved, a parent will often want to remain there with them. This means that any existing mortgage arrangements will need to be reviewed especially as the other partner may wish to buy their own property.


Many spouses are unaware that a pension doesn’t belong solely to the party named on the policy and has to be apportioned along with other assets. Pensions can be dealt with in various ways, such as splitting the fund into two, arranging for a portion of the pension paid to go to the other spouse, or offsetting the value of one spouse’s fund by transferring other assets to the other spouse.


Post-divorce, it makes sense to discuss your revised circumstances with your financial adviser. You’ll need to reassess your financial goals and review your mortgage, life insurance, savings and investment plans. You will also need to remake your Will. Reorganising their finances is for many an essential step in moving forward to a new life.

The information within the article is for information purposes only and does not constitute individual advice. The Financial Conduct Authority does not constitute will writing.