Divorce without a financial settlement is not uncommon in the UK, but it has its risks. While there are legitimate reasons to finalise your separation before finalising the division of money and assets, this is not a clean break and it does not allow you to fully move on.
Because of this, divorce without a financial order can lead to legal disputes further down the line, where one party demands more money than they originally agreed to. Failing to fully split your finances can also leave you liable for your ex-partner’s debts and poor credit rating.
The Ministry of Justice Family Court Statistics Quarterly Bulletin gives an indication of the divorce rate without financial settlement UK couples are entering into.
For January to March 2025, for example, there were:
That means there were only around 40% as many financial remedy applications as there were NFD divorce applications – an indication of how many couples separate without resolving their financial position first.
It’s never too early to start discussing money and assets during separation, and doing so can help take the pressure off your negotiations. Marcia Mediation’s expertise in financial mediation means we are in the perfect position to help you make those important decisions.
A financial remedy order is a court order that finalises the division of cash, savings, assets and liabilities during divorce or civil partnership dissolution. You may also hear it referred to as a consent order.
Many items should be taken into account when negotiating your financial settlement. This includes cash savings, share dividends, private pension pots, rental property income, individual high-value possessions, and a lot more.
You can itemise all of these and provide valuations for them by completing Form E. However, this is not mandatory, as long as you are able to reach an agreement that all parties are satisfied with.
The type of financial remedy order you receive will depend on whether there is any dispute over your financial settlement:
For obvious reasons, a consent order is the preferred outcome. It’s usually faster to reach and leaves both parties feeling more satisfied. Because it typically costs substantially less in legal fees, a consent order also means you both receive more overall.
Divorce mediators are here to help you reach a consent order, by working with both parties to find a middle ground where everybody is happy with what they receive.
It is possible to dissolve a civil partnership or divorce without a financial order in place, as a financial settlement is not mandatory in order to receive the final order for your divorce.
Essentially, the two are separate legal processes. However, this means divorce or dissolution does not directly affect your shared financial liabilities with your former partner. This leaves you open to a number of risks:
Until you have a legally binding financial remedy order (or consent order) in place, your ex-spouse may theoretically take you to court in an attempt to claim money or assets from you.
In some cases in recent years, this includes successful claims made against personal wealth accumulated after the divorce. Until you legally sever the ties, that threat remains in place.
If you have dependents, particularly children under the age of 18 and/or who still live at home, it’s best to get your financial arrangements formalised so their welfare is not put at risk.
While we are not suggesting any parent would wilfully endanger their children, there can be unintended consequences, for example, where informal arrangements for child support payments break down due to one party’s change in income or other commitments.
A spouse’s right to inherit their partner’s estate is one of the strongest entitlements in the probate system. While you might assume this right expires upon divorce, this is not necessarily true.
Under the Inheritance (Provision for Family and Dependants) Act 1975, even a divorced spouse could lodge a claim against a deceased former partner’s estate. A financial remedy order can remove this right, ensuring disputes do not arise during times of family trauma.
Couples sometimes think any agreement, whether verbal or written, will be enforceable if a dispute arises later. This is not the case.
For example, if you agree that one party will make regular support payments to the other, there is no way to enforce this in court without a binding consent order or financial remedy order.
Private pension savings can be hard to accurately value, as it may be many years before you start to receive a payout. They also pose the problem of how to offset their value against more liquid assets and income.
A court-issued pension sharing order can formalise your plans for how to split your pension funds, but you should always have an enforceable arrangement in place for your future retirement income.
There are several reasons for the high rate of divorce without financial settlement UK couples enter into. While these are completely understandable, they can be overcome quite easily with the support of an experienced financial mediator.
If you are on good terms with your ex-partner, you might not feel a need to legally formalise your arrangements, especially if you want them to be flexible in the future, e.g. as your children get older.
We know from experience that circumstances can change, and once-friendly agreements can become strained. It’s often best to get a financial remedy order while things are still amicable, in preparation for the possibility that things change.
Divorce without a financial order can be a false economy, as it leaves both parties open to potentially costly legal proceedings at a later date.
Instead, work together with a financial mediator who can help you to finalise your financial settlement, while avoiding excess fees due to acrimonious negotiations and stubborn stalemates.
Sometimes, one party might be reluctant to finalise the divorce. Delaying the financial negotiations can be one way to do this, whether it’s an act of spite, or because they don’t want to admit the relationship has ended.
Family mediators are sensitive to such feelings. We can work with you to resolve the emotional trauma because we know that in many cases, the dispute over finances is not the true source of conflict.
Unfortunately, awareness of the risks of divorce without a financial settlement is not always very good. Some couples think the final order to grant their divorce is all that is needed.
In truth, even after your divorce is finalised, you are not freed from any shared financial liabilities and your ex-partner may still be able to make a legal claim for more money.
One of the single biggest causes of divorce without a financial remedy order is the stress and anxiety associated with tallying up all your income, savings and assets, documenting the valuations of each and deciding who gets what.
Again, mediators are here to facilitate the process. We can take into account any heirlooms and sentimental items, and make sure you don’t miss often-overlooked assets like private pension savings, so that all parties get a fair settlement with the minimum of stress.
It’s a good idea to get professional help when negotiating a financial settlement as a precursor to applying for a financial remedy order.
In many cases, separating couples choose to work with a mediator. This can be less confrontational because a mediator does not take sides. Instead, they act as a go-between to help both parties reach a mutually agreeable financial settlement.
This has further benefits. Because there’s a common goal to reach a fair financial arrangement, the process is typically faster, with less legal costs.
Once you’ve reached an agreement, you can apply to the court for a financial remedy order, also known as a consent order. This ensures your agreement is legally binding and prevents further claims in the future, so both parties can make a clean break and be financially independent from one another.
We’ve touched on the benefits of mediation in divorce already in this article. Working with professional family mediators means you significantly reduce your risk of divorce without a financial order in place.
This typically saves time and money. It can reduce your stress and anxiety, by keeping negotiations amicable instead of hostile. Crucially, it ensures that when you receive the final order for your divorce, you are in a position to make a clean break both emotionally and financially.
Our mediators in financial cases are usually former solicitors who have a detailed understanding of potentially complex cases and will help you move forward to an agreement that will be both accepted as a reasonable compromise by respective legal teams on each side and acceptable to the court.
Some of our mediators were formerly commercial solicitors and can help with the more complex family business disputes.
While every couple’s situation is unique, we can provide compassionate guidance for specific challenges including:
If you are separating but are not married or you have a prenuptial agreement in place, we can help with the slightly different negotiations that may arise in such cases too.
To find out more, contact Marcia Mediation’s divorce mediation team today, and we’ll be happy to listen to your circumstances and help you decide how to proceed.
If you have any questions, call us on 0330 236 7450 or fill out this form
