A financial order is a legally binding document issued by the court that determines how assets, income, and liabilities are divided. Without one, financial claims can remain open indefinitely, creating potential uncertainty long after the divorce is finalised.
This guide explains the role of financial orders in UK divorces, the types available, and how to ensure your financial settlement is legally secured.
The significance of a financial order
A financial order provides legal certainty by formalising the division of assets and preventing future claims. Even if you and your former spouse have reached an amicable agreement, securing a financial order ensures that the terms are enforceable and final. Without one, either party could make a financial claim at any point in the future, even decades later.
Consider the landmark case of Wyatt v Vince [2015] UKSC 14, where a former wife successfully claimed a financial settlement from her ex-husband 19 years after their divorce, after he became a multi-millionaire. This case underscores the importance of obtaining a legally binding financial order, even if you believe financial matters are resolved.
What assets are considered in a financial order?
A financial order can determine the division of:
- Property: the family home and any other other properties in which either party has an interest.
- Savings and investments: bank accounts, stocks, bonds, and other financial assets.
- Pensions: pension assets may be shared or offset against other financial provisions.
- Debts and liabilities: any loans, mortgages, or credit obligations.
- Maintenance payments: spousal and child maintenance agreements.
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When to apply for a financial order
A financial order should be applied for as part of the divorce process. The court can only approve a financial order after a conditional order (formerly known as a decree nisi) has been granted. However, it is essential to consider financial settlements early to avoid delays in finalising financial matters.
Even if you and your spouse have reached a private agreement, you must still apply for a financial order to make it legally binding and enforceable. Otherwise, future financial claims could still be made.
It is important to be aware that parties dealing with their own divorce proceedings as litigants in person, will not be reminded or warned by the divorce court that finalising the divorce:
- Will affect their legal rights; and
- does not automatically resolve the financial claims which arise on divorce.
It is therefore really important to take specialist advice in relation to financial orders either before or at an early stage in the divorce proceedings.
Types of financial orders the court can make
The court has the power to issue different types of financial orders depending on the circumstances of the case:
- Consent order: if both parties agree on the division of assets, they can formalise their agreement through a Consent Order, which the court must approve to be legally binding.
- Property adjustment order: determines who retains property or how it will be sold and divided.
- Lump sum order: requires one spouse to pay a fixed amount to the other.
- Periodical payments order: arranges ongoing spousal and/or child maintenance payments.
- Pension sharing order: specifies how pension funds are split between spouses.
- Clean break order: ends financial ties completely, ensuring neither party can claim against the other in the future.
How do I enforce a financial order?
If the terms of a financial order are not being met, the applicant can apply for enforcement using Form D50K, either specifying a particular method or requesting that the court determine the most appropriate enforcement action. Available enforcement methods include:
- Attachment of earnings order: if the debtor is employed, the court can order deductions from their salary before payment to ensure compliance.
- Third-party debt order: if the debtor is owed money by a third party, an order can be issued directing payment directly to the creditor.
- Charging order: the court can secure outstanding payments against the debtor’s interest in land or assets.
- Warrant of control: enforcement officers may seize and sell the debtor’s assets to recover the owed sums.
When an order will not be enforced
In cases where the debtor cannot meet their obligations — such as job loss affecting maintenance payments — the court may delay enforcement and allow time for financial recovery. Any agreed modifications must be legally recorded in the order.
Common misconceptions about financial orders
Many people assume that once they are divorced, their financial ties are automatically severed. This is incorrect. Some common myths include:
"We have no assets, so we don’t need a financial order." Even if you have minimal assets now, circumstances can change, as seen in Wyatt v Vince.
"A verbal agreement is enough." Without a court-approved financial order, agreements hold no legal weight.
"Once the divorce is final, we can’t make claims against each other." Without a clean break order, financial claims remain open indefinitely.
How long does it take to get a financial order?
The time frame varies depending on how financial matters are resolved. If both parties agree, a Consent Order can take a few months. However, if court intervention is required, it may take longer. Factors such as asset complexity, disagreements, and court backlogs can affect the timeline.
What happens if you can’t agree on a financial settlement?
If couples cannot reach an agreement, they may need to consider:
- Mediation: a neutral third party helps facilitate an agreement.
- Solicitor negotiation: lawyers negotiate on behalf of each party.
- Private FDR: an agreed specialist family lawyer facilitates negotiations and gives an indication as to how they would determine the case, if they were the Judge.
- Early Neutral Evaluation: an agreed specialist family lawyer gives a neutral view on how they would determine the issues which are in dispute
- Arbitration: a specially trained Arbitrator will make a legally binding decision on the issues in dispute
- Court proceedings: a judge makes a final decision if an agreement cannot be reached through other means.
Financial orders for high-net-worth individuals
Divorces involving substantial assets, businesses, or international elements require specialist financial planning. High-net-worth individuals should consider:
- Business assets and their division.
- Offshore accounts.
- Tax implications.
- The impact of trusts and inherited wealth on settlements.
At Birkett Long, we have the expertise to ensure your divorce is settled fairly, even in high-net-worth marriages.
Financial orders and second marriages
If you remarry without obtaining a financial order from your previous marriage, you could still face financial claims from your ex-spouse. Obtaining a financial order before remarrying is crucial to prevent legal complications.
Do you need a solicitor to get a financial order?
While it is possible to apply for a financial order without a solicitor, the risks of doing so include:
- Drafting errors that make the order unworkable and/or unenforceable.
- Unfavourable financial terms due to lack of legal guidance.
- Delays due to incorrect paperwork.
Seeking professional legal advice ensures that your financial settlement is fair and legally binding.
Let our family lawyers help you
Financial settlements in divorce are complex, and mistakes can have long-term consequences. Whether you need a clean break order, maintenance arrangements, or assistance with enforcing a financial order, we’re here to support you.
FAQs
What is 'fair' in a divorce order?
A fair financial order considers the needs of both parties, ensuring that assets and income are divided equitably rather than equally. The court assesses factors such as the length of the marriage, financial contributions, future earning potential, and the welfare of any children involved. Fairness is determined on a case-by-case basis, prioritising financial stability for both spouses post-divorce.
What assets cannot be split in a divorce in the UK?
While most assets acquired during a marriage can be divided, certain assets may be excluded from a financial settlement. These typically include:
- Assets acquired before the marriage (though they may be considered if they became intertwined with marital finances).
- Inherited wealth, unless it has been shared or used for the family's benefit or needs cannot be met without it.
- Trust funds, depending on their structure and purpose.
- Assets protected by a prenuptial or postnuptial agreement provided the agreement is deemed fair by the court.
What is the 70/30 rule in divorce?
The ‘70/30 rule’ is not a formal legal principle. Rather, the ‘70/30 rule’ is a general reference to cases where courts allocate a greater share of marital assets to one spouse — often the financially weaker party. This can occur when one spouse has significantly lower earning potential, has sacrificed career opportunities to raise children, or requires additional support to maintain financial independence.
What happens with family business assets in divorce?
Family business assets are typically considered part of the marital estate and may be subject to division. Courts assess factors such as:
- The extent of each spouse’s involvement in the business.
- Whether the business was established before or during the marriage.
- How the business contributes to the couple’s financial stability.
Depending on the circumstances, the court may order a buyout, restructuring, or alternative asset division to ensure fairness while maintaining business viability.
We don't have any assets to divide, do I still need a financial order?
Yes, even if you do not have significant assets now, obtaining a financial order — particularly a clean break order — is crucial. Without it, either party can make a financial claim against the other in the future, even years after the divorce is finalised. A financial order legally severs financial ties, preventing unexpected claims later.
Will inheritance be included in a divorce financial settlement?
Inheritance is not automatically included in a divorce settlement, but it can be considered depending on the circumstances. If the inheritance has been kept separate, it may be excluded.
However, if it has been used for marital purposes — such as purchasing a family home — it is more likely to be included in financial negotiations. The court will assess the needs of both parties and any children before deciding whether inherited wealth should be shared.
