The Fair Share Report 2024: Sorting Out Money and Property on Divorce

Divorce, while a common occurrence, remains a complex and often emotionally charged process. One of the most contentious aspects of divorce is the division of money and property. The law governing this is the Matrimonial Causes Act 1973.

This report looks at specifically what financial and property arrangements do couples make, how do they reach these arrangements and the short term impacts of these.

Key Findings

1. Disparity in Settlements: The report reveals significant disparities in how assets are divided, often influenced by factors such as gender, income levels, and legal representation. Women, in particular, mothers and those in older age, tended to be worse off than men even where they had re-partnered following Divorce.
2. Legal Complexity: Only 32% of divorcees made use of lawyers in relation to their financial arrangements, with 42% of those who did not do so deterred by fear of the cost. Yet the amounts spent were relatively low. A quarter of divorcees (24%) had to find less than £1,000, with a further 18% having costs between £1,000 and £2,999. 9% had costs of £10,000 or more, with higher costs associated with greater wealth. Over half of divorcees who had reached a financial arrangement had done so by themselves, a further 17% via solicitor negotiation and 13% through mediation. There was some confusion about what mediation was, and it was more likely to be used by those who had been to a lawyer first. Divorcees were more likely to use a lawyer, and to go to court, when they felt unable to negotiate with their ex by themselves. There was a strong association between using legal services and women getting a better deal.
3. Pensions: Only 11% of divorcees shared a pension pot. In addition, over a third of the people who engaged with the research did not know the value of their pension pot nor that of their spouses. Against this background of lack of knowledge, it can be understood why parties struggle to find a financial settlement if they have not been supported with legal advice.

Recommendations

The Fair Share Report 2024 states (taken from Fair Shares short briefing) as follows:

There is a need for authoritative, accessible, and affordable information and legal advice to provide couples with a clear understanding of the law and how to reach a settlement, with signposting to appropriate and affordable services to help them, such as (but not limited to) mediation, where this is suitable.

Couples should be encouraged to obtain (clean break) consent orders to finalise their arrangements in order to secure certainty.

A legal presumption of equal sharing of assets would not deliver a fair outcome between many divorcees nor reflect their own priorities. Given the range in wealth and earning capacity of the divorcing population, and couples’ own differing priorities and circumstances, it would be more likely to cement inequality as between husbands and wives, with mothers and older wives doing particularly poorer. Instead, policy makers should focus their attention on enabling couples to take full account of all of their assets and their long-term prospects when deciding on what would be the right outcome for them and their family.

In particular, greater consideration needs to be given to how pensions may more easily and more fairly be factored into the arrangements that couples make

Practical Steps for Divorcing Couples
For those currently navigating a divorce, the Fair Share Report 2024 offers practical advice:

1. Documentation: Keep detailed records of all assets, pension values, debts, and contributions, both monetary and non-monetary during your marriage. This documentation can be crucial during settlement negotiations. If at the point of separation you know nothing regarding your spouse’s finances then don’t reach an agreement without finding this information out (and see the paperwork, don’t just take your spouses word for it!). If they refuse to give this to you, think of this as a red flag and a cause for concern in negotiations without legal advice.
2. Seek Professional Advice: Consult with legal and financial professionals to understand your rights and options. This can help you make informed decisions and advocate for a fair settlement. In addition, you may have options available to you that you had not even thought about.
3. Consider Mediation: Mediation can be a less adversarial and more cost-effective way to resolve disputes. It allows both parties to work collaboratively towards a mutually beneficial agreement. In addition, the Government currently has a Family Mediation Voucher Scheme in place at this time and can provide a financial contribution of up to £500 towards the costs of mediation, if eligible.

Here at MBH Solicitors we offer 30minutes free legal advice as well as offering services on fixed fees, payment plans and, in some circumstances, pay at the end schemes. We are here to help and assist you navigate one of the most stressful periods of your life.