Is my spouse entitled to half of my savings in the UK? No matter what your personal circumstances may be, this is absolutely a reasonable question to ask. Dividing your finances is an essential part of splitting a marriage or civil partnership into two independent lifestyles.
Savings and assets are a huge part of that. That’s why at Marcia Mediation, we offer specialist financial mediation alongside our divorce service. We can help you to reach an amicable arrangement, based on what each party is entitled to receive.
First of all, let’s tackle this question in its broadest sense. There are some regional differences in UK law – notably in Scotland, compared with England, Wales and Northern Ireland – so always make sure you get guidance that suits your location.
As a rule of thumb:
The issue to resolve in both cases is whether savings and investments are legally deemed ‘matrimonial property’. That is, whether both parties in the marriage or civil partnership have a reasonable claim to a share during the divorce or dissolution proceedings.
What do we mean by ‘matrimonial property’? The simple definition that is often given includes savings and investments made during your marriage, property purchased jointly, and also any shared debts and liabilities.
However, it’s possible for non-marital assets (e.g. property you owned before you got married) to become part of your matrimonial property.
An example of this is if you owned your home in your sole name, but transferred it into joint ownership when you got married. Or if you had savings in a sole account, but transferred the balance into a joint account.
Non-marital assets are generally limited to savings, investments and properties that you owned in your own name before you got married, and which have never been used for the joint benefit of your spouse.
Savings and investments (including private pension contributions) should be considered when preparing to negotiate a divorce settlement.
However, it’s not as simple as splitting everything 50/50. Instead, you should determine which assets are matrimonial property, and which are non-marital (i.e. predate the marriage and have not entered into the matrimonial finances).
Even then, other factors might influence the balance of who gets what. If you go to court, a judge will typically award what they think is fair – not strictly 50% of the total – and it’s often a good idea to take a similar approach to financial mediation.
This is complicated, as it can depend on the type of asset and how you decide to divide it. For example, if savings are in an account where they can’t easily be transferred, you might choose to keep them where they are, and give the other party an equivalent value in shares.
Here are just a few of the main issues to be aware of in this area:
You might think dividing savings is easy, as they have a clear cash value and, in many cases, can be withdrawn or transferred quickly and easily.
But some accounts do not allow that – including tax-efficient accounts like Cash ISAs. You’ll likely lose your tax-free entitlement if you transfer those savings into an equivalent account in your spouse’s name.
There are several options. You could offset the value of your savings (or your spouse’s share of them) using other property or assets. Or you could agree to allow fixed-term savings accounts to mature, so you don’t lose any interest before you split the balance.
Keep your negotiations amicable if you can. You’re much less likely to lose any interest or tax-free entitlement if you can agree a plan together. This is where financial mediation specialists can help.
Investments like stocks and shares are less ‘liquid’. Their value depends on the current position of the stock market, and to access that value, you have to sell the asset.
The immediate cash-in value (sometimes called the ‘surrender’ value) can be different from the market value – so it’s important to make sure you value your investments accurately when negotiating your financial settlement during divorce.
Remember to factor in any fees, such as financial adviser costs, transaction fees, and capital gains tax. That way, you know that each party is receiving a fair share of the real-terms liquid worth of your investments, and not just their value on paper.
Again, you might not want to sell your shares. Divorce doesn’t mean everything needs to be turned into cash. You could agree for one party to keep the stock investments, while the other takes a larger share of cash savings, or other assets like the house or car.
Pensions are investments that are designed to generate value (e.g. through interest or stock market growth) to provide you with an income in retirement. You usually don’t plan to access their value until you retire.
This can be problematic during divorce. Depending on your age, you might be quite close to retiring, or you might still have decades of working life ahead of you.
Choosing how to split the value of private pension savings can be complicated. It’s not always guaranteed that your spouse will have a claim to your pension pot, depending on the specific circumstances of the savings you have made so far.
There are three main ways to split a pension in divorce:
You can find out more in our Guide to Pensions in Divorce Settlement, or contact our financial mediators who can help you to understand your (and your spouse’s) pension entitlement.
We care about your well-being and want your divorce or dissolution to be stress-free, fair for all parties, and to allow you to embark on your new independent lifestyle with dignity.
Alongside our divorce mediation services, we offer several areas of specialism that can help you to deal with challenging, specific circumstances:
If you’re yet to get married and are already wondering “Is my spouse entitled to half my savings?” then a prenuptial agreement might be a good idea for you – we can help with that too.
No matter what stage you are at, we’re here to help. Crucially, financial worries should not be a roadblock to keep you in an unhappy marriage. Speak to our financial mediators today and we can help you to divorce with dignity, without putting your financial security at risk.
If you have any questions, call us on 0330 236 7450 or fill out this form
