Research shows most couples have only modest assets to share on divorce
Divorce  |  Family law  |  Finance

Research shows most couples have only modest assets to share on divorce

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The popular media is full of stories about high profile divorce cases, often involving celebrities, and almost all involving huge sums of money.

And even the law reports of financial remedy cases largely comprise big money cases, as only couples with substantial assets can afford to get involved in expensive contested court proceedings.

Anyone reading these stories and reports can be forgiven for getting the false impression that such cases are the norm in our family courts.

But new research has shown that that is far from true.Research shows most couples have only modest assets to share on divorce

Fair Shares

The research project, entitled Fair Shares, which was led by the University of Bristol and funded by the Nuffield Foundation, surveyed 2,415 recent divorcees, providing the first representative picture in England and Wales of the financial and property arrangements that couples make when they divorce.

And the findings of the research were both surprising and worrying.

Perhaps the most surprising finding was just how little many couples have to share on divorce.

Far from the millions that we see in most reported cases, the research found that of those divorcees surveyed the median value of their total asset pool, including the net value of the former matrimonial home and any pensions, was only £135,000.

And nearly a fifth of those surveyed had no assets at all to share on divorce.

How much were divorcees left with?

Perhaps it should not be surprising given how modest the assets could be, but the research found that the majority of divorcees left the marriage with under £50,000 by way of assets.

A fifth of divorcees ended up with less than £25,000, and a quarter ended up with nothing or only debts.

Only one in 11 came out of the marriage with £500,000 or more.

So much for big money divorces.

The research also found that equal division of the assets, if any, was not the norm, with only 28% of divorcees reporting that they had divided their assets roughly equally. In some cases there was an unequal division simply because the assets were divided in accordance with who owned what.

And a particularly worrying finding was that only 11% of cases involved sharing of pensions, suggesting that many people were missing out on their pension entitlement. The main reasons given for so few pension sharing cases were general lack of interest in the pension, and a strong sense that it ‘belonged’ to the spouse who had been contributing to it.

Lack of legal advice and help

And that brings us to the last finding of the research: how few couples sought legal advice and help in sorting out their financial and property arrangements.

One of the most important things a lawyer will do before advising a client upon their entitlement in a divorce settlement is ascertain the value of the assets. Obviously, without this information it is impossible to know what a fair settlement is.

But the research found that over half of divorcees who had reached a financial arrangement had done so by themselves, only a third made use of lawyers to sort out their financial arrangements, and 12% had sought no advice at all.

It is therefore unsurprising that the research also found that over a third of divorcees did not know the value of their own pension pot, 10% of homeowners with a mortgage did not know what the equity in their home had been, and 38% of divorcees felt their knowledge of their ex-spouse’s finances during the marriage was not good.

The main reason for not seeking legal help was of course fear of the cost. However, the amounts spent on legal help were relatively low. A quarter of divorcees had had to find less than £1,000, with a further 18% having costs between £1,000 and £2,999. Only 9% had costs of £10,000 or more, with higher costs associated with greater wealth.

The message from all of this is quite clear: whilst assets may be modest, it is still worth seeking legal advice, as the cost involved can be far outweighed by the value of an entitlement that you may be missing out on.

How can we help?

For further information on how we can help, please see our Divorce, Separation, and Finances page.

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