3 important factors affecting divorce settlement trends in the UK

Read about three key factors affecting UK divorce settlement trends, and learn how solicitors and financial experts can work together to meet individual client needs.

The divorce landscape is continually evolving. Legislative changes, economic shifts, and variations in social attitudes can all affect the settlements you help to achieve for your clients.

As a solicitor, staying informed about key developments allows you to provide helpful and relevant support to divorcing individuals as they navigate this challenging period of their lives.

With this in mind, here are three important factors that are currently shaping divorce settlement trends in the UK.

1.  The rise of clean break orders

Ever since the government passed the Matrimonial and Family Proceedings Act of 1984 to encourage “clean break” divorces, they have been a popular choice for many people.

Indeed, the certainty and finality of a court-sanctioned agreement that effectively severs all financial ties between a divorcing couple – or one dissolving a civil partnership – could make a clean break settlement an appealing option for your clients.

Yet, many individuals going through divorce don’t fully understand their financial options, nor the implications these could have on their future.

According to Money Marketing (4 June 2024), a common misconception among divorcing couples is that obtaining a decree absolute not only ends their marriage but also means financial separation – which as you likely know, is not the case.

So, access to legal and financial advice that clearly sets out the potential implications of a clean break settlement – and alternative approaches – could be essential for helping your clients achieve a fair financial agreement.

What’s more, research published by FTAdviser (3 July 2024) has revealed that 23.3 million UK adults have poor financial literacy. If your clients do not fully understand their financial situation, ascertaining what a “fair” settlement would look like could be challenging.

On the other hand, by joining forces with a financial expert, you can ensure that your clients receive the support and guidance they need to negotiate a settlement that protects their long-term financial security.  

2. The early 2020s economic climate

The ongoing cost of living crisis, fluctuating inflation, and a fall in the affordability of housing, have had a profound effect on divorce settlements.

While inflation has dropped significantly from a high of 11.1% in October 2022, the ONS (15 January 2025) Consumer Prices Index rose two months in a row at the end of 2024.

Additionally, the Guardian (2 January 2024) revealed that UK house prices increased over four consecutive months between September and December 2024. The cost of an average home reached £269,426 in December, an increase of almost £12,000 over the year.

This ongoing economic uncertainty means that divorce settlements need to be carefully assessed to ensure that they account for inflation and the long-term needs of each party.

For clients who are struggling to afford a new home after their divorce, solicitors may need to explore creative solutions such as shared ownership properties and deferred sales.

What’s more, the post-pandemic jobs market may be exacerbating the financial challenges some of your divorcing clients are facing. According to Personnel Today (11 December 2024), job postings fell by 24% in 2024 and there was also a dip in advertised salaries.

So, if you have divorcing clients who are facing employment and income uncertainty, they might benefit from speaking to a financial expert.

I can use cashflow modelling software to help them understand the potential financial implications of settlement proposals under different economic scenarios. This insight could allow your clients to make informed decisions about their divorce settlements.

3. Changing family dynamics

Family households in the UK are much more varied than in previous generations.

The most recent data published by the Office for National Statistics (ONS; 25 January 2024), the proportion of people aged 16 years and over cohabiting with their partner – not in a marriage or civil partnership – increased from 19.7% in 2012 to 22.7% in 2022.

Additionally, the number of people in same-sex marriages increased from 26,000 in 2015 to 167,000 in 2022.

These modern family structures present unique financial challenges for separating couples.

For example, blended families may have a complex mix of assets from previous marriages and specific estate planning needs when it comes to providing for children from different relationships.

Any of your divorcing clients who face such challenges are likely to need tailored legal and financial support to ensure equitable outcomes for both parties.

I have extensive experience working with a diverse range of clients and I specialise in divorce. By collaborating, we can provide the bespoke guidance your clients need to feel empowered and confident about their future following their separation.

Get in touch

If you’d like to learn more about how we can work together to support your clients in achieving a fair divorce settlement, I’d love to hear from you.

Please contact me at lottie@truefinancialdesign.co.uk or call 07824 554288.

I am happy to accommodate whatever mode of communication works best for you and your clients.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

The Financial Conduct Authority does not regulate cashflow planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Act.