⚠️ The Risks Of Divorcing Without a Financial Settlement

What Are the Risks of Divorcing Without a Financial Settlement?

The consequences of proceeding without a financial order are well-established in law.

As one of the largest filers of divorce applications in England and Wales, we speak to couples every day who got divorced online, but they didn’t sort out their finances.

In 2025, 39% of all applicants through Divorce-Online included a financial order, indicating the number of couples at risk of future disputes or financial claims.

Here are the principal risks of divorcing without a financial settlement:

1. Financial Claims Can Be Made at Any Point After Divorce

There is no time limit on financial claims following divorce in England and Wales. Either party may apply to the court for a financial remedy order at any point after the marriage ends, provided no such order has previously been made. The claim does not expire upon the granting of the Final Order.

When assessing a claim, the court considers the parties’ financial circumstances at the time the application is made, not at the time of the divorce. Property acquired, businesses built, or pensions accumulated after the marriage ended may all be considered by the court.

The Supreme Court decision in Wyatt v Vince [2015] illustrates this plainly. Kathleen Wyatt and Dale Vince divorced in the 1990s when neither party had significant assets. No financial order was made. Nearly 20 years later, Ms Wyatt applied to the court after Mr Vince had founded a multi-million-pound green energy company.

The Supreme Court confirmed the claim could proceed, and Ms Wyatt received a £300,000 settlement. The absence of a financial order at the time of the divorce meant the claim remained available two decades on.

2. Informal Agreements Between the Parties Are Not Enforceable

Informal financial agreements reached between separating spouses, whether verbal or in writing, are not legally binding unless approved by the court as a consent order. If one party fails to comply with an informal agreement, the other party has no mechanism to enforce it.

This applies regardless of how clearly the agreement is documented or how amicable the separation was at the time. An experienced divorce solicitor can advise on what terms are appropriate, but only the court can make those terms binding.

3. Changes in Circumstances Can Give Rise to a Claim Years Later

Where no financial order is in place, a material change in either party’s financial circumstances may prompt the other to bring a claim.

An inheritance, the proceeds of a business sale, a pension crystallising, or a significant increase in income can all be the subject of a financial remedy application made long after the divorce was finalised.

The position is symmetrical. If your own circumstances deteriorate after the divorce through redundancy, ill health, or other financial difficulty, an unresolved claim from a former spouse may become an additional financial liability at an already difficult time.

4. Pension Rights Cannot Be Addressed Without a Financial Order

Pensions are often among the most valuable assets in a marriage, yet they cannot be shared or earmarked between former spouses without a pension-sharing order or pension-attachment order issued by the court.

Without a financial order, a former spouse has no legal entitlement to any part of the other’s pension, regardless of any informal agreement.

This disproportionately affects the lower-earning spouse, who may have reduced their working hours or left employment altogether during the marriage, resulting in a smaller pension in their own name.

Failing to address pension division at the time of divorce can leave that party with substantially reduced retirement income and no remedy available after the fact.

5. Remarriage Extinguishes the Right to Bring a Financial Claim

Once a person remarries, they permanently lose the right to apply to the court for a financial remedy order against their former spouse. The former spouse, however, retains that right against them.

This asymmetry is not widely understood. A person who remarries without first obtaining a financial order from their previous marriage cannot subsequently apply to the court, even if they later discover they were entitled to a significant share of assets. The right to remarriage is lost and cannot be reinstated.

6. A Former Spouse May Have Standing to Claim Against the Deceased’s Estate

Where no financial order has been made, and one party dies, the surviving former spouse may be entitled to bring a claim against the estate under the Inheritance (Provision for Family and Dependants) Act 1975. This can arise even where the parties have been separated for many years and have had no ongoing financial relationship.

A financial clean break order, once made, removes this avenue of claim. Without it, the position on death remains uncertain and may require resolution through the courts.

7. Joint Financial Liabilities Are Not Severed by Divorce Alone

Divorce does not alter the parties’ liability to creditors for joint debts or obligations incurred during the marriage. Without a court-approved financial order that addresses those liabilities, each party may remain liable for joint debts regardless of any private agreement between them.

Creditors are not bound by such agreements.

A clean-break order, where appropriate, provides a formal basis for severing those financial connections and addressing responsibility for any outstanding joint liabilities.

8. Children’s Financial Arrangements May Remain Unresolved

Where children are involved, the absence of a financial order can leave important matters unresolved beyond child maintenance.

The division of the family home, housing arrangements for the primary carer, and responsibility for education or other costs may all require a court order to determine with certainty.

Without clarity on a financial settlement regarding those matters, disputes are more likely to arise, and the financial position of the household in which the children live may remain uncertain.

Why Do So Many People Divorce Without a Financial Order?

Based on the cases we handle, the most common reasons people proceed without a financial order are:

• A belief that the Final Order resolves all financial matters. It does not. The Final Order dissolves the marriage. A financial order is a separate application and is required to address the financial claims arising from it.
• An assumption that an amicable agreement is sufficient. An agreement between the parties, however clearly documented, is not enforceable unless it has been approved by the court as a consent order.
• Concern about legal costs. A consent order can be obtained online for £499. The cost of contested financial proceedings, should a claim be made in the future, is significantly higher.
• A view that there is nothing to divide. Even where there are limited assets at the time of divorce, a clean-break order dismisses all future financial claims. Without one, that right to claim remains open as circumstances change.

How to Formalise a Financial Settlement in Divorce

Where both parties have reached an agreement, the process of formalising it through the court is straightforward.

1. Reach an agreement: The parties agree on how to divide property, pensions, savings, and debts. This can be achieved directly, through mediation, or with the assistance of solicitors.
2. Apply for a Consent Order: A solicitor drafts the consent order and prepares Form D81 (Statement of Information for a Consent Order), setting out both parties’ financial positions. Both parties sign the documents, which are then submitted to the court for approval.
3. Judicial approval: A judge considers whether the terms are fair and reasonable. If approved, the order is sealed by the court and becomes binding on both parties. A clean-break clause is typically included to dismiss all future financial claims.

An application for a consent order can be made once the Conditional Order has been granted. It is advisable to have the consent order approved before applying for the Final Order, so that both the dissolution of the marriage and the financial settlement are concluded at the same time.

Where the parties cannot reach an agreement, either party may apply for a Financial Remedy Order by filing Form A. Both parties are then required to provide full financial disclosure on Form E, and the court will determine the appropriate outcome through a structured hearing process.

Is It Ever Sensible to Divorce Now and Deal With Finances Later?

Where both parties have limited assets and are in agreement, some couples choose to finalise the divorce first and address finances afterwards. In cases with straightforward financial positions, this may not cause immediate difficulty.

The difficulty with leaving finances unresolved is that circumstances change. Assets appreciate, pensions mature, inheritances arise, and new relationships begin.

Each of these events can alter what is at stake and what each party is entitled to.

The longer financial matters remain unresolved, the harder it becomes to obtain full and accurate disclosure, and the greater the likelihood of dispute.

Experienced divorce solicitors often recommend that the divorce and the financial settlement be progressed in parallel, so that both can be concluded at the same time. This is achievable in most cases and avoids the uncertainty that comes from leaving financial claims open.