Nuffield Foundation’s report, “Fair Shares – Sorting out Money and Property on Divorce,” thoroughly examines financial and property arrangements in divorce cases. Published on November 1st, 2023, in collaboration with other organisations, this study assesses the effectiveness of current laws and processes in achieving fair outcomes for divorcing couples.
Overview of the Report
The Matrimonial Causes Act 1973, which governs divorce financial settlements, has faced criticism in recent years. Primarily focusing on high-profile cases, the critique represents only a fraction of the divorcing population. Therefore, the “Fair Shares” report addresses this gap by providing a detailed analysis of the entire divorcing population. This underlines the importance of a robust evidence base for policymakers.
The study explores three main research questions:
- What financial and property arrangements are made during divorce?
- How do couples arrive at these arrangements?
- What are the short-term effects of these arrangements?
To answer these questions, the research employs a large-scale online survey of 2,415 individuals who divorced in the past five years, administered by YouGov, along with 53 in-depth online qualitative interviews.
Key Findings
The financial context for the average divorce is characterised by asset pools, with the median value of total assets at £135,000. The study identifies four categories of divorcees based on their attitudes and objectives: Housemates, Parents, Partners and Unequal.
These broad ‘types’ of divorcee were identified based on their attitudes towards marriage and their ex-spouse, as well as their behaviour during the marriage. These types help explain the arrangements made during the divorce.
- ‘Housemates’: They take an individualistic approach, keeping finances separate and focusing on ‘ownership’ in asset division.
- ‘Parents’: Their focus is on the children, with arrangements for their care determining how assets are allocated.
- ‘Partners’: They see marriage as a joint enterprise with equal contributions, allocating assets accordingly.
- ‘Unequal’: In relationships marked by dominance and abuse, these divorcees had little power in asset allocation.
Lack of financial and legal knowledge is prevalent among divorcees, with significant percentages unaware of their ex-spouse’s finances and lacking knowledge about their own pensions. The study highlights the diverse sources from which divorcees seek information. This, therefore, emphasises the need for authoritative and accessible guidance.
Financial Outcomes and Asset Distribution
Contrary to common beliefs, the report dispels the notion of equal sharing of assets being the norm. Only 28% of divorcees received around half of the total asset pool. Unequal distribution is influenced by factors such as individual circumstances, needs, and motivations for a “clean break”.
Legal oversight, either through the court or with legal advice, appears to influence financial outcomes positively. Divorcees who did not use legal services were more likely to have inadequately addressed pension positions. In contrast to popular misconceptions, the expenses incurred by divorcees — 62% of whom had costs — were quite reasonable.
Recommendations for Policy
The report suggests a need for accessible and affordable information and legal advice early in the divorce process. We echo this sentiment and emphasise the importance of our clients being well-informed. The report advocates for a range of appropriate and affordable resolution methods. It places a particular emphasis on better integrating pensions into divorce arrangements.
The “Fair Shares” report provides valuable insights into the financial and property arrangements of divorcing couples. It challenges common misconceptions and emphasises the need for evidence-based policymaking. As policymakers consider potential reforms, the report highlights the importance of addressing the diverse needs and circumstances of the majority of divorcees.