Divorce often brings emotional and financial challenges that can linger long after the paperwork is complete. In England and Wales, it is estimated that more than 100,000 couples divorce each year, yet only a third formalise their financial arrangements through a court order. For the rest, the financial outcomes often remain undocumented, leaving a significant knowledge gap about how most couples manage their assets post-divorce.
This is where the Fair Shares study, conducted by the University of Bristol’s Law School, offers ground breaking insights. By focusing on both court and non-court populations, the study provides a comprehensive look at the financial realities divorcing couples face and challenges common misconceptions.
Key Findings from the Fair Shares Study
- Wealth Distribution is Modest
Contrary to popular belief, most divorcing couples do not have substantial wealth. The study revealed that the median value of total assets, including homes and pensions, was just £135,000. Many had no significant assets, debunking the myth that divorcing couples typically divide large sums of wealth. - Financial Disparities Between Spouses
The study highlighted stark financial inequalities, particularly between husbands and wives. Wives, especially mothers, were often in precarious financial positions, earning less and having poorer pension provisions. This disparity has lasting consequences for women’s financial security, particularly in retirement. - Asset Division is Rarely Equal
Although the law allows for flexible arrangements, the study found that most couples did not split their assets equally. Instead, distributions were influenced by individual needs, circumstances, and the desire for a clean break. - Misconceptions Around Spousal Maintenance
The idea of spousal maintenance as a “meal ticket for life” is largely unfounded. Only a minority of divorcees reported spousal maintenance arrangements, and most of these were time-limited rather than indefinite. - Overlooked Pensions
One of the most concerning findings was the lack of awareness around pensions. Many divorcees did not understand the value of their or their ex-spouse’s pension pots, leading to low levels of pension sharing. This underscores the need for better education during divorce proceedings.
What Does This Mean for You?
The Fair Shares study shows that divorce settlements often fail to account for critical assets like pensions and are rarely balanced equally. To ensure a fair outcome, couples must approach divorce with a clear understanding of their financial situation and seek professional advice to navigate these complexities.
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