Does it matter if you’re a breadwinner or a homemaker when agreeing a financial settlement?22 Mar 2023 | Sarah Norman-Scott
When it comes to deciding how wealth is split, English courts do not discriminate based on your role within the family.
A Spanish court hit the headlines recently after it ordered a businessman to pay his ex-wife €205,000 – just over £182,000 – in recognition of her 25 years as a homemaker. The judge calculated the figure based on the annual minimum wage she would have received throughout the couple’s marriage.
In this case, the couple has entered into a separation of property agreement, similar to a prenuptial agreement, which specified that whatever each partner earned was theirs alone. Since Mrs Moral looked after the family and worked as a housewife during the couple’s marriage, and Mr Moral was the sole breadwinner, the agreement would have left Mrs Moral with no access to the couple’s wealth after they split. The judge decided this would be financially abusive and ordered the record payout.
While the case was decided in Spain, it puts into sharp focus the issue of financial settlements in England. How are financial settlements determined here? And what happens to the financially weaker spouse who made sacrifices made during the marriage, such as staying home to look after the children?
What’s mine is yours
In England and Wales, equality is the starting point for any financial settlement. This means that each party should receive a fair share (not necessarily equal) of matrimonial assets such as money, property, investments and pensions. If both parties earn a similar amount and made similar contributions during the marriage, the court will likely order an equal split.
In reality, however, it is rarely a 50-50 split. The court’s main aim is to achieve fairness and ensure that one party does not profit at the expense of the other due to their money-making abilities. When deciding what’s fair, the court will take into account things like:
- Length of the marriage
- Each party’s income and financial needs
- Standard of living during the marriage
- Time out of the workplace
- Age and earning capacity
- Any non-financial contribution made by either party, such as one partner staying at home for childcare.
Different rules apply to inherited wealth and pre-existing trust funds. In those cases, assets are much less likely to be divided equally.
Homemakers are the same as breadwinners
When assessing each party’s contribution to the marriage, the court has made it clear that homemakers stand on equal footing with breadwinners. Stay-at-home parents may not contribute to the family’s bank account, but they do make an equal contribution to the welfare of the family, and as such as considered an equal contribution.
The result is that a stay-at-home spouse or financially weaker partner could be entitled to receive more of the other partner’s income or assets if this would make their settlement fairer. Often, the financially stronger party will be ordered to make ongoing maintenance payments in order to meet the other party’s needs.
This approach is more generous towards the financially weaker party than many other jurisdictions, which make financial settlements based on financial contributions alone.
The court’s decision when settling a financial dispute will always depend on the individual case. For example, a 50-year-old woman who has not worked for the duration of her 30-year marriage may have a tough time finding a job and supporting herself financially. She might expect to receive a larger share of the matrimonial assets than a 25-year-old who earns similar to their spouse and could easily start again with a reasonable salary.
The recent case in Spain serves as an important reminder that financial settlements after a divorce should never just be about money. It is important to consider all the contributions each partner has made, both financial and non-financial, and ensure that these are taken into account when deciding what’s fair. After all, a marriage is about two people working together – not one benefitting from the other’s sacrifices.
Share this article
Sarah Norman-Scott Associate Solicitor
Contact us today
For a free initial conversation call 020 7485 8811
Email us Send us an email and we’ll get back to you
Insights about Divorce Financial SettlementsVIEW ALL
Does it matter if you’re a breadwinner...
When it comes to deciding how wealth is split, English courts do not discriminate based on your role within the...Read more
Are trusts protected from divorce?
Can trusts protect an inheritance from your spouse? A trust is a separate legal entity. Neither spouse owns its assets. ...Read more
Is a limited company protected from divorce?
Is my spouse entitled to half of my business? If you are involved in running a limited company, then it...Read more
How is a pension split in a divorce?
Pensions and Divorce In a divorce, pensions are taken into account together with all other financial assets. Once all assets...Read more
Who gets the house in a divorce?
How is a house divided in a UK divorce? For most people contemplating divorce, one of the main concerns will...Read more
How to set aside an order in financial...
My ex-spouse didn’t tell the truth about their finances when we divorced, can anything be done? Can the financial...Read more
Pension sharing on divorce
What is the new procedure for pension sharing? Pensions are one of the biggest assets of a marriage, yet many...Read more
My ex has cut me off during divorce
Can my spouse cut me off financially? Unfortunately, it is far too common that when a client says it’s...Read more
How the Court views loans from parents during divorce A frequent issue in financial divorce cases is a loan from...Read more
Mesher Orders Explained
What is a Mesher order? A Mesher Order allows the sale of the family home to be postponed in a...Read more
Private Financial Dispute Resolution (FDR) for Divorce
Private FDR helps divorcing couples reach a financial settlement Our specialist divorce lawyers are keen to ensure our divorcing clients...Read more
Negotiating financial settlements in divorce
Costly and acrimonious divorces: a lesson in what not to do If you’re determined to pursue your financial claims...Read more
Uncovering hidden assets in your divorce
Hiding Assets During a Divorce As part of your divorce, you and your ex will have to agree on how...Read more
Case Law Divorce Settlement
6 cases that shape your divorce settlement Part of what makes our divorce lawyers experts in their field is knowing what...Read more
Does Divorce Revoke A Will?
Divorce and Wills In the midst of a divorce or separation, it’s rare for couples to think about making...Read more
Beneficial Interest in Property
Andrew Watson, a London-based divorce lawyer in our family department and Resolution accredited cohabitation lawyer, summarises the law in relation...Read more
Divorce in your 60s – The Financial Implications
How common is a divorce in your 60s? The latest divorce figures from the Office of National Statistics (ONS) show...Read more
Tax and Divorce
Tax implications for divorcing couples As the end of the Stamp Duty holiday looms on 31 March 2021, that is not the...Read more
Setting aside a financial remedy order
What has been the impact of the coronavirus pandemic on financial remedy orders? Can you do it at all? Barder...Read more
The Resurrection of Calderbank Offers When a couple divorces, they are encouraged by the Courts to consider other dispute resolution...Read more
Bankruptcy and Divorce
Will my spouse declaring bankruptcy affect my divorce settlement? The case of Hayes v Hayes (2012) EWHC (Ch) (Chancery Division (23.03.12) (unreported...Read more
Self-Help in Financial Remedy Proceedings
One of the first things we explain to clients who are getting divorced is that, when it comes to financial...Read more
Effect of Delay on Financial Relief Claims: Vince...
Wyatt v Vince This unusual case demonstrates the risks of failing to bring a financial claim on divorce promptly, or,...Read more
Supreme Court Hands Down Judgement in Mills v...
The Supreme Court today handed down judgement in the case of Mills v Mills, setting aside the order made by...Read more