8 June 2026
When discussing divorce and finances, people often use the phrase ‘taking them to the cleaners’. This expression suggests that one spouse leaves with everything while the other is left with nothing. In reality, family practitioners and the courts approach financial settlements with one overarching objective: achieving fairness based on the parties’ individual circumstances.
How Are Matrimonial Assets Divided on Divorce? The Yardstick of Equality Explained
The landmark case of White v White [2001] established the ‘yardstick of equality’. This means that when dividing matrimonial assets on divorce, the court’s starting point is generally an equal division of assets.
However, equality is not always the final outcome. The court may depart from an equal division where fairness requires it – particularly if one party’s needs cannot be met by a 50/50 split.
In assessing this, family practitioners consider a range of factors set out in Section 25 of the Matrimonial Causes Act 1973 (the ‘Section 25 Factors’).
What Factors Does the Court Consider in Divorce Financial Settlements? (Section 25 MCA 1973)
These include:
- The income, earning capacity and assets each party has or is likely to have in the foreseeable future.
- The financial needs, obligations and responsibilities each party has or is likely to have in the foreseeable future.
- The standard of living enjoyed during the marriage.
- The age of each party, and the duration of the marriage.
- Any physical or mental disability that each party might have.
- Contributions that have been made or are likely to be made in the foreseeable future – financial or domestic.
- The conduct of the parties (the threshold for considering conduct is very high and must be something the court feels would be inequitable not to consider. Conduct is relevant in limited and exceptional circumstances).
- Any benefits one party may lose as a result of the divorce.
- The welfare of any children under the age of 18, which the court must give first consideration to.
If after taking these factors into account an equal division will not achieve a fair outcome for both parties, an unequal division may be justified.
For example, one party’s need may be greater where they are the primary carer of children, or have a reduced earning capacity, limiting their ability to obtain housing or income independently.
What Is Financial Disclosure in Divorce Proceedings?
A key part of reaching a fair agreement is the exchange of financial disclosure.
Both parties are usually required to complete a Form E setting out full details of their financial circumstances, including their assets, liabilities, income, savings and pensions. Supporting documentation must also be provided. These forms are then exchanged simultaneously and carefully reviewed.
If either party considers the disclosure to be incomplete or to require further clarification, they can raise further questions by way of a formal questionnaire. These questions are answered with supporting documents and the replies, together with supporting documentation, are then exchanged and reviewed in a similar manner to that of the Forms E.
This disclosure process ensures that each party has a full and transparent picture of the ‘matrimonial pot’. Accurate disclosure is essential, as it underpins meaningful negotiation and ensures that any settlement is based on reliable information.
These principles and processes demonstrate that financial settlements are not about one party winning at the expense of the other. Instead, they are about achieving fairness and ensuring both parties’ needs are properly met.
Speak to a Divorce Solicitor in Surrey Today
Our friendly and experienced family team always work with the utmost regard for your individual circumstances and needs. If you would like guidance on what a fair financial settlement might look like for you, please get in touch today.
