Date updated: Tuesday 23rd January 2024

When considering financial matters on divorce, a variety of factors will need to be taken into account when determining how such finances are to be separated. 

The starting point will usually be to look at what finances are available to the family.  Therefore, it is sensible to begin by establishing what both the husband and the wife own by way of property, investments, pensions and other assets and what income they are both capable of generating.  Once this has been established, it is then possible to look at how this is to be divided and how a balance may be achieved across capital assets, income and pensions.

The Matrimonial Causes Act 1973 sets out the different factors which are to be considered when assessing the division of assets and these are commonly known as the “section 25 factors”.  It is necessary to give consideration to all of the circumstances of the case but, in particular, account must be taken of the following:-

  • First consideration must be given to the welfare of any child of the family;
  • The income, earning capacity, property and other financial resources available to each party;
  • The financial needs, obligations and responsibilities of each party;
  • The standard of living enjoyed by the family before separation;
  • The age of each party and the duration of the marriage;
  • Any physical or mental disability of either party;
  • Contributions which each of the parties has made to the welfare of the family, to include any contribution made by looking after the home or caring for the family;
  • Conduct of each of the parties, but only if such conduct is very serious in nature and inequitable to disregard;
  • Any lost benefit as a result of divorce e.g. widow’s benefits from a spouse’s pension.

It can be difficult to balance the above factors against one another.  However, reality will often dictate that the needs of the husband, wife and, most importantly, the children, will take precedence.  For example, it will usually be necessary for the family pot to be stretched over two homes as opposed to one and this can be a difficult exercise for many families. Therefore, by the time needs have been met, it may not be possible to give significant regard to the remaining factors, although this will of course depend on the finances available to the family as a whole.