42% of marriages in the UK end in divorce, yet very little is known about how couples divide their assets and the value of those assets, according to research by the Nuffield Foundation.
January is reported to be the biggest month for divorce. Perhaps having spent Christmas together and looking ahead to changes in the new year - this time of year convinces people that now is the time for change.
Divorce rates rise by 10%
The Nuffield research claims that tens of thousands of couples in England and Wales get divorced every year. Figures show that in 2021, 113,505 divorces were granted – up nearly 10% from the previous year when there were 103,592 divorces.
But it should be noted that divorce and splitting your finances, are separate but related processes.
You don't need a lawyer to divorce, especially if both parties agree. The downside to DIY divorce and financial settlements is that you might not know the questions to ask or the issues that you should think about - so it can be an idea to at least have a fixed fee consultation just to start things off, even if you are going to do the rest your self.
However you are organising your affairs, to make your agreement legally binding, a court will need to approve it. So you need to involve the courts if you want a clean break.
If a couple fails to obtain a financial consent order following divorce, either party will be able to make a financial claim against the other at any time in future.
Q: What is often forgotten in a divorce settlement?
Because they are not part of your regular spending or income, pension pots are often forgotten or their real importance is often under estimated.
In fact, the evidence suggests that pension saving are often the largest asset in a divorce, making up 42% of household wealth, according to the Office for National Statistics. By comparison, the share of wealth held in property is 36%.
Yet, just 16% of couples split pensions in divorce, which can often lead to women significantly missing out on income in retirement, according to Scottish Widows.
Previous research by Scottish Widows claims that more than half of married people (56%) would fight for a fair share of any jointly owned property, and 36% would want to split their combined savings. Yet fewer than one in 10 (9%) claim they want a fair share of pensions, despite the average married couple’s retirement pot totalling £132k
"More married people would be concerned about losing a pet during a settlement than sharing a pension" (13% vs 9%).
The consumer organisation Which? suggests that there are three primary ways to divide pensions:
Pension sharing order: A percentage of one spouse’s pension is transferred to the other. This approach allows for a clean break, with assets divided at the point of divorce. In England, Wales, and Northern Ireland, this applies to the entire pension pot, while in Scotland, only the value accrued during the marriage is considered.
Pension offsetting: One spouse keeps their pension in exchange for another asset, such as the family home. While this offers a clean break, the partner who forfeits the pension may lose out long-term, especially if the pension, such as a final salary scheme, exceeds the value of the assets they receive.
Pension attachment order: This involves one spouse receiving a lump sum or income from the other’s pension when they start taking it. In Scotland it's referred to as a pension earmarking. While it allows the pension holder to retain control over investments, it doesn’t provide a clean break and could leave the receiving spouse vulnerable if the pension holder dies before retirement.
Q: How much does it cost to use a lawyer?
The unhelpful answer is, it depends. While true, that doesn;t give you much guidance. So given the caveat that it really does depend on how complex things are and how expebsive a lawyer you are using, here is some general guidance.
Just one-third of divorcing couples finalise their finances through a court order, and only 10% actually go to court, according to a survey by Nuffield Research
Ex-wives are often left worse off when couple's don't use a lawyer
Their report into the finances of divorce advices that "Avoiding a potentially adversarial system might seem like a good thing, but with the majority of cases bypassing the legal system (which is designed to help achieve fairness), it means ex-wives are often left worse off. One reason is that pension sharing is included in just 10% of divorces, adversely affecting women who generally have smaller pension pots than men.
Only two in five divorcees used a lawyer for information, advice or support, often due to fears of the cost. Worryingly, more than one in 10 sought no advice or information to help them with their divorce"
Karen Dovaston, who is a solicitor and Chair of The Law Society Family Law Committee, says that on average a divorce will cost between £1,500-£3,000.
She told me that she has a fixed fee first consultation and then charges an hourly rate. Although some solicitors will offer a free introduction, it's not clear whether this will cover enough ground to understand what needs to be done and it might be a good idea to check what could be covered in an initial consultation whether it is free or whether a charge then applies.
Q: How do I find a divorce solicitor
Like finding a good builder, this is easier said then done. Personal recommendation is always a good idea, but I don't know a lawyer they'd recommend and the ones I have used in the past, I wouldn't particularly want to use again - so this is a bit of a pain in that it is an important but difficult and in the end rather random decision.
A place to start is
1: The Law Society's Find A Solicitor service.
2: The Review Solicitors website is a sort of legal version of Trip Advisor, where users leave reviews on the solicitors they have used, and is worth checking out.
3: Resolution offers good guidance on the options available, how to contact legal experts but also how to use arbitration as an alternative to lawyers.
4: using arbitartion can also be a useful alternative to lawyers and you can find out more at the Institiute of Family Arbitration website
There is a service which I have heard about called Amicable. They say they are different because to ordinary solicitor services "...because we work with couples together. We also offer fixed and transparent fees that include VAT and enable couples to spread their payments over several months with our flexible payment plans. We’re more comprehensive than mediation because we also prepare couples' legal documents and manage the court process. Our specialists are trained in helping couples navigate the legal and emotional journey of divorce and separation."
In looking around, I'd certainly check out their costs compared to a regular solicitor, before making your decision.
Q: If I want to keep costs down - how do I at least start the process online?
You can certainly get the process started by yourself and start online. The government website is where to start and you can find the link here
Another good source for information is this guide from Scottish Widows
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