Financial settlement in divorce, and how it is decided

What a divorce financial settlement covers

A financial settlement sets out how you divide assets such as pensions, property, savings and investments, and it can include maintenance, including child maintenance^[2]. GOV.UK says you can usually avoid court hearings if you agree, and if you cannot agree on everything you can ask a court to make a financial order^[1].

An agreement that is not legally binding cannot be enforced by a court^[3]. The Family Justice Council says most couples agree how to share out their money and property without a judge deciding^[9]. Knowing what a judge would do still matters, because a consent order is only approved if the judge thinks it is fair^[3].

The financial order is a separate application from the divorce, which you can make with the divorce application or at any time after^[10].

What the court considers: the section 25 factors

Section 25 of the Matrimonial Causes Act 1973 tells the court to have regard to all the circumstances, giving first consideration to the welfare of any child of the family under 18, and in particular to^[4]:

• each person's income, earning capacity, property and other resources, now and in the foreseeable future;
• each person's financial needs, obligations and responsibilities;
• the family's standard of living before the marriage broke down;
• each person's age and how long the marriage lasted;
• any physical or mental disability;
• the contributions each has made to the family, including looking after the home or caring for the family;
• conduct, but only if it would be unfair to ignore it;
• the value of any benefit, such as a pension, that someone loses the chance of because of the divorce.

Arrangements for any children come first, and the reason for the divorce is not taken into account^[16].

What the court can order

The court's powers include transferring property, ordering a sale and splitting the proceeds, letting one of you stay in the home until an event such as the children growing up, a lump sum, sharing a pension, maintenance and school fees^[17]. It can also order maintenance for one of you while the case goes on ("maintenance pending suit")^[18].

Apart from maintenance, these orders are normally made together as a "once and for all" settlement; maintenance continues and can be reviewed if circumstances change^[17]. More on spousal maintenance.

Pensions in a financial settlement

Pensions are easy to overlook and can sometimes be the most valuable asset^[23]. The court can make a pension sharing order, moving a percentage of one pension into the other person's name, or a less common attachment order paying part of the pension income; or a pension can be offset against other assets, which needs care^[23].

Pensions can only be shared by a court order^[24]. The basic and new State Pension cannot be shared^[23]. A cash equivalent transfer value can take up to 3 months to arrive, so ask each provider early^[25].

What a financial settlement costs

The court fee for a consent order is £62, and for an application where the court decides it is £321, both in force since 13 July 2026^[5][6]. Legal adviser fees vary with experience and location^[3]. Help with Fees can reduce or cover a court fee on a low income or benefits^[29].

Legal aid is not available for most financial disputes, except where you are, or are at risk of being, a victim of domestic abuse, including financial abuse; it may be available for mediation and legal advice alongside it^[30]. In court, each side usually pays its own costs, but the court can order costs because of a party's conduct, including late or poor disclosure^[31].

Transfers between spouses made under a court order or formal divorce agreement are treated for Capital Gains Tax as giving rise to no gain or loss^[32].