How Are Assets Split During Divorce?

One of the first worries many people have when separating is money. Questions like “Will I have to sell the house?”. “What happens to our savings?” or “Can my ex take my pension?” are incredibly common and understandably stressful.

At Garner & Hancock, we regularly support clients through divorce and financial settlements. While every case is different, understanding the basics of how finances are divided can help you feel far more informed and prepared.

Is Everything Automatically Split 50/50?

Not necessarily.

In England and Wales, the court’s starting point is fairness rather than a rigid formula. While an equal split is often a useful reference point, it is not an automatic entitlement. The court will look at the full picture and ask whether the outcome feels fair, and if one party is receiving significantly less than the other, there should be a good reason for it.

Beyond that, the court will consider a range of factors, including:

• income and earning capacity
• housing needs
• childcare responsibilities
• pensions
• future financial needs
• health and age
• length of the marriage
• standard of living enjoyed during the marriage
• conduct, where it would be inequitable to disregard it

For example, if one parent will be the main carer for young children, they may receive a larger share of the available assets to provide stable housing.

The court approaches financial remedy cases through three overlapping principles, established in Miller v Miller; McFarlane v McFarlane [2006]: needs, compensation, and sharing. In most cases involving families of ordinary means, needs will be the dominant consideration.

What Assets Are Included in a Divorce Settlement?

Many people are surprised by how much can be included in the financial discussions during divorce.

Assets may include:

• the family home
• savings accounts
• pensions
• investments
• businesses
• vehicles
• valuable jewellery or collections
• overseas property
• debts and loans

Importantly, it does not always matter whose name the asset is in. For example, even if the house or savings account is solely in one spouse’s name, it may still form part of the overall settlement.

However, it is important to understand that not all assets are necessarily treated equally. The courts draw a distinction between “matrimonial” and “non-matrimonial” property. Assets brought into the marriage, inheritances, and gifts received during the marriage may sometimes be “ringfenced” and excluded from the sharing principle, particularly in shorter marriages.

What Happens to the Family Home?

This is usually the biggest concern for separating couples.

There are several common outcomes:

1. The Property Is Sold

The home is sold, and the proceeds are divided between both parties.

This is common when:

• children are older
• neither party can afford the property alone
• both parties need funds to move on

2. One Person Buys Out the Other

One spouse keeps the property and pays the other their share of the equity.

For example:

· House value: £600,000

· Mortgage remaining: £250,000

· Equity: £350,000

If divided equally, each party may be entitled to around £175,000.

The spouse remaining in the property may:

• remortgage
• use savings
• offset against pensions or other assets

3. Deferred Sale (Mesher Order)

Sometimes the property sale is delayed until a future event, often when the youngest child reaches a specified age or completes full-time education.

This can allow children to remain in the family home while both parties retain a financial interest in the property.

A Mesher Order creates a trust for sale and will specify a range of trigger events, which may include remarriage or cohabitation of the occupying spouse, as well as the children reaching adulthood. It is important to understand that the non-occupying spouse typically remains liable on the mortgage during this period, which can affect their ability to borrow independently. Mesher Orders are not always the right solution and require careful consideration.

What Happens to Pensions During Divorce?

Pensions are often overlooked initially, but they can be one of the most valuable assets in a marriage.

There are three main ways pensions can be dealt with:

Pension Sharing

A percentage of one spouse’s pension is transferred into the other spouse’s pension pot, giving them an independent pension in their own right.

Pension Offsetting

One spouse keeps more of another asset (such as the house) in exchange for the other keeping more pension value.

Pension Attachment Orders

Part of the pension income is paid to the former spouse when retirement begins.

However, attachment orders are generally regarded as the least satisfactory option: they depend entirely on the other party’s retirement decisions, they cease on the recipient’s remarriage, and they do not give the recipient a clean financial break. They are rarely recommended in practice.

Many people underestimate the value of pensions, especially NHS, public sector, or long-term workplace pensions.

An important distinction exists between defined benefit (final salary) schemes and defined contribution (personal or workplace) pensions. These are valued in entirely different ways, and the Cash Equivalent Transfer Value (CETV) provided by a scheme does not always reflect the true value of a defined benefit pension. In many cases, the court will expect or require a report from a Pension on Divorce Expert (PODE) before a fair division can be agreed. We can advise you on whether this is necessary in your circumstances.

What If My Ex Earned More Than I?

The court recognises both financial and non-financial contributions.

That means contributions such as:

• raising children
• supporting a spouse’s career
• running the household
• caring responsibilities

are considered valuable contributions to the marriage.

This is especially important for spouses who:

• reduced working hours
• became stay-at-home parents
• paused careers for childcare

What If Someone Is Hiding Assets?

Both parties are legally required to provide full and frank financial disclosure. This obligation arises under the Family Procedure Rules 2010 (Part 9) and is given practical effect through the completion of a Form E, a detailed financial statement covering all assets, income, liabilities, and pensions.

Financial disclosure is not a one-off exercise. If your circumstances change at any point during proceedings, for example, if you receive an inheritance, a bonus, or come into other assets, you are obliged to disclose that promptly.

Financial disclosure includes:

• bank accounts
• property
• pensions
• business interests
• investments
• cryptocurrency
• debts

If someone deliberately hides assets, the court can:

• reopen settlements
• impose penalties
• make adverse cost orders

Critically, the Supreme Court confirmed in the case of Sharland v Sharland [2015] that a consent order obtained by fraudulent non-disclosure can be set aside, even after it has been approved by the court. The court will not allow a dishonest party to benefit from concealment.

In more complex cases, forensic accountants or financial experts may become involved. While this can sound daunting, it is simply a way of ensuring that the court has an accurate and complete picture of the finances. These experts can investigate business valuations, trace hidden or transferred assets, and unpick complex financial arrangements that might otherwise be difficult to scrutinise.

Do We Have to Go to Court?

Not always.

Many financial settlements are resolved through:

• solicitor negotiations
• mediation
• collaborative law
• consent orders

Court is usually considered a last resort when agreements cannot be reached.

Before issuing financial remedy proceedings, you will ordinarily be required to attend Mediation. This is a mandatory step under the Family Procedure Rules designed to ensure parties have considered mediation before using the court. Exemptions do exist, including where there is a history of domestic abuse and we can advise you on whether an exemption applies to your situation.

Court proceedings, which follow a structured process of a First Appointment, a Financial Dispute Resolution (FDR) hearing, and if necessary, a Final Hearing, are usually considered a last resort when agreements cannot be reached.

Even where matters are agreed amicably, it is essential to formalise the agreement in a consent order approved by the court. Without a sealed consent order, financial claims between former spouses remain open and can be pursued years or even decades later, regardless of any informal agreement reached between you.

The court retains a supervisory role over consent orders and is not simply a rubber stamp. The terms must be shown to be fair in all the circumstances.

What Am I Actually Entitled To?

There is no fixed formula, which is why legal advice matters.

Entitlement depends on:

• your financial needs
• housing requirements
• childcare arrangements
• available assets
• future earning capacity
• the overall circumstances of the marriage

This is why two divorces can result in completely different financial outcomes, even where the asset values appear similar.

Final Thoughts

Divorce finances can feel overwhelming, especially when emotions and uncertainty are involved. However, understanding the process and obtaining advice early can help you make informed decisions and avoid costly mistakes.

At Garner & Hancock, our experienced Family Law Solicitors provide practical, supportive advice tailored to your individual circumstances.

If you would like confidential advice regarding divorce, financial settlements, property or pensions, our team is here to help.

Please note: this article provides general information about the law in England and Wales. It is not legal advice, and outcomes will always depend on the specific facts of your case. We strongly recommend seeking specialist advice at the earliest opportunity.

This article applies to married couples and civil partners. If you are cohabiting but not married, the law is significantly different and you would not have access to the same financial remedy powers. Please get in touch with us separately for advice on cohabitation disputes.