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Read more articles in: Blog, Family Law, Stuart Daniel

Financial remedy orders during divorce – What to consider now and potential future changes

Divorce is never easy, and the financial implications of ending a marriage can be one of the most challenging aspects to deal with.

The current system of financial remedy orders in England and Wales is based on laws that have remained largely unchanged since the Matrimonial Causes Act 1973 (the Act).

However, a recent Law Commission scoping report has examined potential reforms that could shape the future of financial remedy orders.

While these proposals are not yet law, they could influence future changes.

Current financial remedy orders during a divorce – Flexibility but uncertainty

At present, the courts have wide discretion when deciding financial settlements. They consider various factors, including:

  • The needs of each party
  • Contributions made during the marriage
  • The standard of living during the relationship
  • The welfare of any children under 18

This flexibility allows judges to tailor financial settlements to individual cases, but it also creates uncertainty, as outcomes can vary.

The lack of clear and organised rules makes it harder for separating couples to predict what a fair settlement looks like, sometimes leading to lengthy and costly disputes.

The current system can sometimes encourage disagreements rather than help couples reach agreements quickly.

Legal fees can become a major burden, and many people struggle to understand their rights, particularly when they do not have legal representation.

Potential changes – More structure, less discretion?

The Law Commission’s report outlines several possible models for reform to financial remedy orders, including:

Codification – Writing the law more clearly

One suggestion is to bring case law principles into legislation, making the law easier to understand.

This would not change how settlements are decided but would make the law more transparent and predictable.

Default property regimes – A set formula for asset splitting

Many countries use a default system where property acquired during the marriage is automatically split 50/50 on divorce.

England and Wales currently do not have this system, but the Law Commission is exploring whether a similar community property model could work here.

Nuptial agreements

Right now, pre-nuptial and post-nuptial agreements are taken into account but are not legally binding. The Commission suggests making them enforceable, provided they meet certain fairness conditions.

Other key areas of financial remedy orders that could change

Beyond the broad structural reforms, the report also looks at specific areas surrounding financial settlements in divorce where the law might evolve.

One of the main areas under review is spousal maintenance.

Currently, courts have discretion in awarding maintenance, sometimes granting payments for life, though there is a general push towards achieving a clean break where possible.

The proposed reforms suggest introducing fixed-term limits to prevent long-term financial dependency and reduce legal disputes.

Pensions are another focus of potential reform.

Despite being one of the most valuable assets in a divorce, they are often overlooked, particularly by lower-earning spouses.

At present, pensions can be shared through pension sharing orders, but these require an application and are not automatic.

The Law Commission suggests making pension division the default, ensuring that both spouses receive a fair share of retirement savings rather than one party retaining the entire pension while the other receives other assets, such as the family home, which may not offer the same long-term financial security.

Another area of reform relates to financial support for adult children. Currently, maintenance for children generally ends at 18 unless they are in full-time education or have special needs.

However, with more young adults remaining financially dependent due to rising education costs and the increasing difficulty of entering the housing market, the Law Commission is exploring whether parental financial obligations should extend beyond 18 in more cases.

What could these changes mean for you?

For now, the law remains the same. However, these proposed changes highlight areas where reform may be coming. If you are going through a divorce, you should:

  • Get legal advice early to understand how the law applies to your situation.
  • Consider a pre-nup or post-nup if you want clarity over financial remedy orders in case of future separation.
  • Think about pensions as they can be one of the most valuable assets in a divorce settlement.
  • Be aware of potential changes. While nothing is certain, financial remedies law is under review, and future divorcing couples may see a more structured system.

The legal process surrounding financial remedy orders in a divorce may change in the near future, but the core principle remains: a fair settlement that meets both parties’ needs.

If you are facing a divorce, our expert solicitors are here to help. Contact us today for advice.

Stuart Daniel

Director – Head of Family Department

I qualified as a Solicitor in 2006 and now specialise in divorce, financial settlements, childcare arrangements and Pre Nuptial Agreements. I have many years’ experience as a private family lawyer having worked with two other local firms before returning to Mander Hadley, where I first undertook work experience during my university studies.