5 Myths About Financial Settlements in Divorce

Myth 1

Assets in My Name Are Mine to Keep

The Truth: Legal Ownership Does Not Determine How Assets Are Divided in Divorce

This is one of the most common assumptions we encounter, and one of the most potentially damaging. Many people believe that because a savings account, property, or investment is in their sole name, it is theirs to keep when a marriage ends. This is not how English family law works.

In England and Wales, the court takes a broad view of what counts as matrimonial assets. Anything acquired during the marriage — regardless of whose name it is in — is generally considered part of the matrimonial pot and subject to division. This can include:

• The family home, even if the mortgage is in one person’s name
• Savings and investments built up during the marriage
• Business interests developed during the marriage
• Bonuses, shares or other financial benefits received during the marriage

There are some exceptions — assets brought into the marriage or received as inheritance may be treated differently, depending on the circumstances — but the key point is that legal ownership alone does not determine the outcome.

Myth 2

The Higher Earner Always Comes Out on Top

The Truth: Income Is Just One of Many Factors — Contributions Come in Many Forms

It is a common fear among lower earners — or those who stepped back from work to raise children — that they will be at a financial disadvantage in a divorce settlement. Equally, higher earners sometimes assume their income gives them greater entitlement to keep what they have earned.

Neither assumption reflects how English family law actually operates.

The court recognises that contributions to a marriage take many forms. A parent who stepped back from their career to raise children, support a partner’s professional development, or manage the family home has made a significant contribution — one that the law values equally alongside financial earnings.

The court’s overriding aim is a fair outcome for both parties, taking into account their respective needs — particularly where children are involved. A lower earner may actually receive a greater share of assets to reflect their reduced earning capacity and greater childcare responsibilities going forward.

Myth 3

Pensions Are Not Part of the Divorce Settlement

The Truth: Pensions Are Often the Most Valuable Asset in a Marriage — and Frequently Overlooked

This is perhaps the most financially significant myth of all. Many people going through a divorce focus entirely on the family home and overlook the pension — often the single largest asset either party owns.

Pensions accumulated during a marriage are matrimonial assets and are absolutely subject to division in divorce proceedings. In England and Wales, there are three main ways pensions can be dealt with:

• Pension sharing — a portion of one spouse’s pension is transferred to the other, creating a separate pension pot
• Pension offsetting — the pension value is offset against other assets (for example, one party keeps the pension while the other receives a greater share of the property)
• Pension earmarking — a portion of the pension income is directed to the former spouse when it eventually comes into payment

Ignoring pensions during a divorce settlement can leave one party — often the one who took time out of work for family reasons — significantly worse off in retirement. The right approach depends heavily on individual circumstances, the types of pension involved, and your long-term financial goals.

Myth 4

Prenuptial Agreements Are Not Worth the Paper They Are Written On

The Truth: Prenups Carry Significant Weight in English Courts — If Done Properly

Prenuptial agreements — contracts entered into before marriage that set out how assets would be divided in the event of divorce — have long been dismissed as unenforceable in England and Wales. That view is now significantly out of date.

While prenuptial agreements are not yet automatically legally binding under English law, the landmark Supreme Court decision in Radmacher v Granatino (2010) established that a prenup will be given decisive weight by a court — provided it meets certain conditions:

• Both parties entered into it freely, without pressure or duress
• Both parties had independent legal advice before signing
• Full financial disclosure was made by both parties
• It was signed in good time before the wedding — not at the last minute
• It does not leave either party in a position of undue hardship

A well-drafted prenuptial agreement can provide both parties with clarity, protection and peace of mind — particularly where one or both have significant assets, business interests, or children from a previous relationship.

Myth 5

Once the Divorce Is Final, Financial Claims Are Closed

The Truth: A Final Order Ends the Marriage — But Not Necessarily the Financial Claims

This is a myth that can have genuinely devastating consequences, and it is one we feel strongly about making sure people understand.

Many people assume that once the divorce itself is finalised — via what used to be called the Decree Absolute and is now known as the Final Order — all financial matters are automatically resolved. They are not.

In England and Wales, a Final Order dissolves the marriage. It does not extinguish financial claims between former spouses. Without a legally binding financial settlement in place — known as a Consent Order, approved by the court — either party retains the right to make financial claims against the other, potentially for years or even decades after the divorce.

There have been well-publicised cases in which former spouses have made successful financial claims many years after a divorce, including against lottery winnings and inheritances. These situations arise precisely because no Consent Order was put in place at the time.

A Consent Order formally records the financial agreement reached between both parties and, once approved by the court, makes it legally binding and enforceable. It is the only reliable way to achieve a true financial clean break.