Reaching a financial agreement is a crucial step in any divorce. Whether you’re dividing property, pensions or debts, having a clear, fair financial settlement can make the entire process smoother – and protect both parties from future disputes.
In this guide, we explain what a financial settlement agreement is, what it should include and how to formalise it through the courts – along with how to get a free 30-minute consultation with a solicitor to ensure your agreement is legally sound and enforceable.
What is a financial settlement agreement?
A financial settlement agreement sets out how a couple’s finances will be divided after divorce or civil partnership dissolution. It covers everything from property and savings to debts and pensions.
This agreement can be made privately between you and your ex-partner, through mediation or with the support of legal professionals. However, to make the settlement legally binding, it must be turned into a court order – known as a Consent Order – and approved by a judge.
Why is a financial settlement agreement important?
Many people assume that getting divorced ends all financial ties between spouses – but that’s not the case. Without a financial settlement, either party can make future claims against the other, even many years after the divorce is finalised.
A formal agreement offers:
- Clarity over who gets what
- Protection against future financial claims
- A clean break where appropriate
- Legal backing if one party breaches the agreement
Whether you have significant assets or just want a clean financial break, a well-prepared agreement is essential.
What can a financial settlement include?
A financial settlement agreement can deal with a wide range of issues, including:
- Division of the family home and other property
- Pension sharing or offsetting
- Savings, investments and other financial assets
- Debts and liabilities, including loans and credit cards
- Spousal maintenance – regular payments from one spouse to the other
- Child maintenance, where relevant
- Arrangements for the sale or transfer of property
Every couple’s circumstances are different and the agreement should reflect what is fair and practical based on your financial situation.
How do you reach a financial settlement?
There are several ways to agree a financial settlement:
- Direct negotiation – You and your ex-partner agree terms without external help.
- Mediation – A trained mediator helps you reach an agreement together.
- Solicitor-led negotiation – Each of you is represented by a solicitor who negotiates on your behalf.
- Court proceedings – If no agreement can be reached, the court will decide for you.
Many couples are able to reach a settlement without going to court, especially with the help of a solicitor or mediator.
Making your agreement legally binding
Once you’ve reached an agreement, it must be drafted into a Consent Order and submitted to the Family Court for approval. This involves:
- Preparing the order (usually by a solicitor)
- Completing a D81 Statement of Information about your financial situation
- Sending both documents to the court for review
The judge will review the agreement to ensure it is fair. If satisfied, they will seal the order, making it legally binding.
Without a Consent Order, your financial agreement is not enforceable – and claims can be reopened later.
What is a clean break?
A clean break is a type of financial settlement where both parties agree that no further financial claims will be made against each other in the future. This is suitable when:
- There are no ongoing maintenance payments
- Each party has sufficient income and assets
- Both agree to end all financial ties
A clean break can be included in the Consent Order and is particularly important if you want full financial independence moving forward.
Can you change a financial settlement agreement?
Once a Consent Order has been approved by the court, it’s generally very difficult to change – especially for lump sum payments or property transfers. However, ongoing obligations like spousal maintenance can sometimes be varied if circumstances change significantly (e.g. job loss, illness or remarriage).
It’s important to get legal advice before agreeing to any settlement to ensure it’s fair and sustainable in the long term.
What happens if someone breaches the agreement?
If your ex-partner fails to comply with a financial settlement, you can apply to the court to enforce it. Enforcement methods may include:
- Deductions from salary or bank accounts
- Charging orders over property
- Seizure of assets
- Committal to prison in extreme cases
Having a court-approved Consent Order makes enforcement much easier than trying to rely on an informal agreement.
Get expert help with your financial settlement
Dividing finances after a divorce can be complicated – but you don’t have to do it alone. A solicitor can help you, understand your entitlements, negotiate a fair settlement, draft and submit a legally binding Consent Order and avoid pitfalls that could lead to future claims.
At Osbourne Pinner Solicitors, we offer a free 30-minute consultation to discuss your case. Contact us today via the form below, call 0203 983 5080 or email [email protected] to speak with a local divorce solicitor near you. We can speak with you via video call or welcome you to one of our local offices in London (Harrow, Canary Wharf or Piccadilly Circus) or Manchester City Centre.
