Financial Mediation

Splitting your finances when you break up: What is fair?

Clients often come into mediation saying that they want to be sure that the financial agreement that they reach is fair. This blog post attempts to answer the question of ‘financial mediation: what is fair?’

Warning: I am an accredited mediator and not a qualified lawyer.
This information is provided to give you simple and straightforward information about issues impacted by divorce and separation.
However, you should not treat this information as legal advice. It is always advisable to take full advice on your particular circumstances from a solicitor.

 Please note that this post was written in January 2021 and will not be up-dated. You will need to make your own enquiries as to current accuracy.

There isn’t a mathematical formula into which you can drop all of your financial information in order to come up with a split of your finances. Indeed the law is fairly unhelpful in giving the layperson specific rules and guidance on who should have what. But for the average couple coming into mediation, who perhaps have a home with a mortgage, maybe a few savings and perhaps some pensions, the law is not complex.

What the law says is fair

If you go to court to seek a decision on the split of your finances, the court will look at all of the circumstances of the case with first consideration being given to the welfare of any child of the family.

In addition, the court will take into account what are referred to as the ‘s.25 factors’. These factors are listed in the Matrimonial Causes Act 1973, s.25. They cover factors such as income and earning capacity of each person and the financial needs of each person.

The factors are described in detail in the AdviceNow booklet ‘Sorting out your Finances when you get Divorced’, which can be downloaded here

How will you know if the agreement you reach is fair?

I always recommend that my clients download the AdviceNow booklet and read it before coming into mediation. It gives a very clear and practical explanation of how the courts approach sorting your finances when you get divorced.

It also gives some case studies and so you can see how the law is applied in different circumstances. Having read the booklet, clients realise that the decisions are based on common sense and the law is not complex.

Another booklet that provides similar information, in a slightly different way is written by the Family Justice Council and is called ‘Sorting out Finances on Divorce’ and can be downloaded here:

It is also important that clients in mediation take advice from a solicitor. The solicitor will look at the proposals from your point of view. They can point out any legal pitfalls and also discuss with you what they think a court might order in your circumstances. This advice means that you a fully informed when you make decisions in mediation.

The bottom line is that the agreement needs to feel fair to both of you. This sometimes means that your agreement is slightly different from what a court might order, or even what your solicitor advises. One of the advantages of mediation is that you can reach an agreement that works for both of you - not one that is imposed on you by the courts.

How we reach a decision in mediation

Although clients will often ask their mediator whether they feels the agreement is fair, it is not a mediator’s role to give any view on whether the proposals are fair. However, what a mediator will do is to take you through a process to ensure that you have considered all of the s.25 factors.

Having completed financial disclosure, our starting point in mediation tends to be how you will both re-house yourselves and any children. This may mean moving house or it may mean staying put but with different mortgage or ownership arrangements.

In mediation, we work through the financial implications of all options so that you can work out which are financially viable and the pros and cons of each option. We need to be sure that you both have enough capital to finance your chosen option, but also we need to be sure that you can both cover your monthly expenses going forwards.

For some people, there is no money left over once they have both re-housed themselves and the children and set up their finances so that they can both cover their monthly outgoings. For others, where there is money left over, then we consider how this will be split between you and also how any pensions should be split.

If you reach agreement in mediation, you will need to get your agreement approved by the court. They will be checking that the agreement that you have reached is fair in all of the circumstances and that the welfare of any children have been taken into account.

A final word

Clients often come into mediation feeling very fearful about the future and uncertain as to how they will re-house themselves and find enough to live on. This is completely understandable.

Realistically, you are going to have to find a way of taking one household and splitting it in two. For most people it is likely to mean that there is a drop to their standard of living and less to go around. However, there will be a way that you can make it work – there always is. You just need to find it – and mediation will help to support you to do this.


For more information about mediation, please contact me or on 07706 513496.