What is a Financial Order in Divorce?

Posted on: 7 mins read
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Lorraine Harvey

Partner, Family Law

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A Financial Order in divorce is a Court Order which sets out the financial arrangements between you and your ex-spouse. The Financial Order is approved and issued by a Judge, after which your agreement is legally binding in England and Wales.

Different Types of Financial Orders

We provide a brief explanation of the following Financial Orders below:

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Getting a Financial Order

To get a Financial Order for your divorce, you need to make an application to the Court. Before you do, it's best to speak to our Divorce Solicitors, because we can advise you on what Financial Orders would be suitable in your circumstances, and can make the Court application for you.

For initial advice get in touch with our Divorce Solicitors.

Financial Orders in Divorce

Discussing a 'Financial Order in divorce' can be somewhat misleading, as the term encompasses a range of different legal orders and solutions. These financial orders are designed to address the division of assets and financial responsibilities during and after a divorce. The specific type of financial order that is most suitable for an individual's situation will vary significantly based on their unique circumstances.

Some of the most common types of Financial Orders in divorce include:

A Consent Order

A Consent Order sets out how your assets and debts should be divided. Some divorcing couples can make these decisions between themselves, whereas others need to negotiate through a Divorce Solicitor, mediator or Judge. If no decision can be reached, the matter must go to Court where a Judge decides on your behalf.

Once the divorce financial settlement is finalised, a Judge can make the arrangements legally binding with a Consent Order. The Judge will only grant the Consent Order if the agreement is fair and reasonable to each person. If the Judge is satisfied, then a Consent Order is issued. This contains a ‘clean break’ clause, ending the financial commitments that exist between you and your ex-partner.

A Consent Order is a crucial part of a divorce, especially when it comes to splitting up money, property, and debts. Here's how it works:

  1. Talk it Out: Some couples going through a divorce can work together to decide how to divide their assets and debts. They might figure this out on their own or with the help of a lawyer or mediator. But not everyone can agree easily. When there's a big disagreement, a judge might have to step in and make the decisions for you.
  2. Court Decides: When there's no agreement in sight, the matter ends up in court. This is where a judge looks at all the details and decides who gets what.
  3. Making It Legal: Once you've settled on how to divide everything, it's time to make it official. A judge will only approve a Consent Order if it's fair to both people. They want to be sure no one's getting a bad deal.
  4. Clean Break: The Consent Order usually includes a special clause. This part is like a 'clean break' – it means you and your ex won't have any more financial ties. Your money and property are now separate.

You can work it out together, or a judge can decide for you if you can't agree. Once everything is fair and settled, the judge makes it official with the Consent Order. This order ends the financial connection between you and your ex-partner, giving you a fresh financial start.

A Clean Break Order

Clean Break Orders end your right to make a claim for financial provision against your ex, and vice versa. Consent Orders also fulfil this function, but are specifically for divorcing couples who have assets to split. If there are no matrimonial assets but you still want to cut the financial ties between you, a Clean Break Order is necessary.

It’s worth noting that unless you have either a Consent Order or a Clean Break Order, your ex can demand further money from you at any point in the future, unless they remarry. This is because the law in England and Wales says that while a Decree Absolute brings your marriage to an end, your financial obligations to each other continue indefinitely – unless the Court grants a ‘clean break’.

Here's why a Clean Break Order is so significant:

In simpler terms, a Clean Break Order is like a safety net that ensures you won't have to provide further financial support to your ex-spouse in the future. It's particularly important when there are no shared assets to divide, as it formally severs the financial ties between you . Without such an order in place, your ex-spouse could, theoretically, come back later and ask for more money, unless they remarry. So, it's a way to guarantee a clean break from any future financial claims.

A Pension Sharing Order

You and your ex-spouse may have rights to a portion of each other's pensions. If that's the case, a Pension Sharing Order comes into play, detailing how the division of pension assets should occur. However, the specifics of your pension rights hinge on several important factors:

  • Pension Pot Size: The size of each pension pot plays a significant role. The more substantial the pension, the more there is to share.
  • Age: Your age at the time of the divorce or separation can affect your pension rights. For instance, if you're closer to retirement, your pension may hold a more substantial value.
  • Marriage Duration: The length of your marriage or civil partnership is another crucial factor. Longer marriages may result in a more significant entitlement to each other's pensions.
  • Career Prospects: Your future career prospects and earning potential can influence the division of pension assets. If one of you has a higher income-earning potential, it may be considered in the settlement.
  • Personal Needs: The court takes into account your individual financial requirements and circumstances. If one of you has greater financial needs, it could impact the division of pensions.

Understanding these factors is essential when considering the division of pensions. A Pension Sharing Order ensures a fair and equitable distribution of pension assets based on your unique situation, providing clarity and security in this crucial aspect of financial settlement.

A Property Adjustment Order

Property Adjustment Orders set out what should happen to the family home, including whose name it should be held in, who has the right to live there and until what time. There are various possible scenarios, and as such there are different kinds of Property Adjustment Order. For example, a Mesher Order says the sale of the property must be deferred until a certain trigger event.

A Maintenance Order

Maintenance Orders establish how much spousal maintenance must be paid to the financially weaker party, and for how long. Not everyone is entitled to receive spousal maintenance from their ex-partner, and again it depends on factors such as the length of the marriage, the wealth of each person, the needs of each person, and the role each person played in the marriage.

Maintenance Orders that demand ongoing maintenance payments are also known as Periodical Payments Orders. Maintenance Orders can also be obtained on an interim basis while the divorce is being finalised (known as ‘Maintenance Pending Suit’). Orders that deal with Child Maintenance are available too.

A Lump Sum Order

A Lump Sum Order is a legal provision that obligates one party in a divorce or separation to provide the other party with a one-time, lump sum payment. However, the concept behind this order goes beyond a mere exchange of money. It often involves a more intricate financial arrangement:

  • Asset Exchange: In many cases, the party making the lump sum payment is allowed to retain ownership of certain assets, often the family home, in exchange for this payment. The idea is to achieve a fair and balanced distribution of assets, ensuring that both parties receive something of value.
  • Deferred Payments: The lump sum doesn't always need to be paid in one go. Depending on the circumstances, it can be broken down into a series of instalments, making it more manageable for the paying party. This approach helps in situations where a single immediate payment would be financially burdensome.

Lump Sum Orders are a practical way to settle financial matters in a divorce. They aim to balance the distribution of assets and provide financial security to both parties. Instead of a one-sided financial arrangement, these orders promote fairness by allowing the paying party to retain specific assets whilst fulfilling their financial obligations through manageable payments. It's a flexible and effective approach to ensure that both parties can move forward with their financial lives after a divorce.

For more information see Divorce Financial Orders and Financial Settlements.


Government Website (www.gov.uk): UK Government

Year of Publication: 2023

Title of Webpage: Money and property when a relationship ends

URL: https://www.gov.uk/money-property-when-relationship-ends

PDF Document (assets.publishing.service.gov.uk)

Year of Publication: (2023)

Title of Document: (I want to apply for a financial order)

URL: (https://assets.publishing.service.gov.uk/media/5b2a4e37e5274a190c1b70c1/d190-eng.pdf)

Mediation Website (www.mediateuk.co.uk): Mediate UK

Year of Publication: (n.d)

Title of Webpage: Guide to a Financial Consent Order

URL: (https://www.mediateuk.co.uk/guide-to-a-financial-consent-order/)

Lorraine Harvey

Partner, Family Law

Areas of Expertise:
Family Law

Lorraine is a Partner at Simpson Millar, specialising in Family Law for over 20 years.

She handles middle to high net value cases, including pension claims and complex trust, and also advises on pre-nuptial and post-nuptial agreements.

Lorraine has unrivalled knowledge of public sector pensions, in particular police pensions, having advised police officers on pension claims for two decades.

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