Split finances after divorce
How to split your finances after divorce
The divorce process can be a challenging and emotional process. Even if it was an amicable decision, you both have to untangle the life you shared.
Knowing how to split your finances after divorce, as well as rebuilding your life afterwards, can potentially become complicated. In this blog, we’ll look at settling your finances after divorce. Taking steps and learning how to manage your money now could safeguard your financial future.
How to split your finances
Start by getting to grips with how the courts look at dividing finances. In England and Wales, they follow Section 25 of the Matrimonial Causes Act 1973. This lets the courts share money and assets in a fair way.
A fair outcome often means an equal 50/50 split, but this isn’t guaranteed. There are factors that influence how finances and assets are shared out. If you understand this rule, you could be in a position to better protect your finances after your divorce.
Plan finances carefully
You’ll then need to work out how to divide everything you built or bought together. Start by pulling together a clear record of your personal financial position. List every asset and liability in your name, your ex-partner’s name, and anything shared. This includes savings, mortgage details, car finance, plus any other shared debts like joint loans that you took out with your ex.
Also, pensions are considered a marriage asset, but they’re often overlooked in divorce settlements. Women, in particular, risk losing out if pensions are not factored into the financial agreement. Pension sharing orders ensure that there is a fair division of retirement funds.
What influences the finances you get after divorce?
The courts don’t just split things in half and call it done. They look at many factors:
- How long you were married: Longer marriages often lead to more equal splits. In shorter marriages, what each person brought into the marriage may matter more.
- What each person contributed: That means both money and time. For example, if one partner gave up work to raise children, the court may give them a bigger share of the assets.
- Children’s needs: Courts put children first. Decisions about who stays in the home, how much maintenance is paid and who covers future costs are made with their welfare in mind.
What about prenups or postnups?
Prenuptial and postnuptial agreements aren’t automatically binding in UK law, but courts often take them seriously. They may carry more weight if both people got legal advice when they signed. While the court could still overrule them, having one in place may help protect your financial position – especially if you have large assets or a business.
Can settling finances after divorce be easy?
This depends on the situation. If you and your ex-partner agree on how to divide things, you can create a financial agreement and submit a consent order to the court. This confirms the arrangement and gives it legal weight.
Even if things are friendly between you, always get legal advice. If you don’t, you might miss out on something important or agree to unfair terms without realising.
When is settling finances after divorce more complicated?
Things get harder when people hide money or refuse to cooperate, or when emotions take over. It takes longer to sort out if you run a business, own property abroad or hold both joint and personal debts.
Disagreements over children often slow things down, too, especially if they change housing or income needs. If one of you doesn’t understand the finances, it could lead to confusion or mistrust. A financial adviser and solicitor could help you stay informed and in control.
Rebuilding your finances after divorce
Once the settlement is final, you’ll need to focus on rebuilding your finances after your divorce.
- Make a budget
This should include your rent or mortgage, bills, childcare and any loan repayments. Start by reviewing your income, expenses and debt. Close any joint accounts or change them to your name only. Make sure your credit report is clean and accurate.
- Set small financial goals
Create some short-term goals for the next few months, such as building an emergency fund, clearing outstanding credit card debt or saving for a new sofa.
- Make longer-term goals
Think long-term, too. Look ahead to retirement savings and pensions. You might want to save for a mortgage deposit on your new home or build up your child’s education fund.
If you need help setting up your new home, borrowing might be part of the picture. Personal loans for home improvements or essential furniture could give you a fresh start, provided you borrow responsibly.
If you have children, think carefully about how child maintenance fits into your budget. You could agree on this with your ex or use the government’s Child Maintenance Service. Look at how childcare affects your work hours and income. If your situation has changed, you might be eligible for benefits or tax-free childcare.
Make changes with loans from Evolution Money today
If you’ve just bought your own home after divorce and want to make essential updates – maybe you need to renovate or do some repair work – taking out a secured loan could help you cover the costs. It’s important to note that your home may be repossessed if you do not keep up repayments on a mortgage or any other debts secured on it. However, if you build in repayments into your new setup, you may find that this suits your financial plans.
At Evolution Money, we have loans from £5,000 to £100,000 to help fund your new home and fresh start. We’re proud to be rated ‘Exceptional’ for the service we provide to every customer. To see if you can get a loan with us, simply check your eligibility today.
Looking for more advice on how to manage your finances? Visit our help and advice hub. You’ll find a wealth of articles designed to inspire and guide you on your journey to financial strength.
Representative 28.96% APRC (Variable)
For a typical loan of £26,600 over 180 months with a variable interest rate of 19.56% per annum, your monthly repayments would be £484.00. This includes a Product Fee of £2,660.00 (10% of the loan amount) and a Lending Fee* of £763.00, bringing the total repayable amount to £87,030.00. Annual Interest Rates range between 11.7% to 46.5% (variable). Maximum 50.00% APRC. *Lending Fee varies by country: England & Wales £763, Scotland £1,051, Northern Ireland: £1,736.
Think carefully before securing debts against your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
